/ 



The Making of the Reparation and 
Economic Sections of the Treaty 



The Making of the Reparation 

and Economic Sections 

of the Treaty 

by 
BERNARD M. BARUCH 

Economic A rlvir.fr to the A merican Commission to Negotiate 
Peace, ami Member of the Economic Drafting Committee, 
the Reparation Commission, the Economic Com- 
mission, etc.; Member of the Supreme 
Economic Council; Former Chair- 
man of the United States 
War Industries 
Board. 




Harper &. Brothers Publishers 

New York and London 



/ 



D< 



"The Making of thb K - 



■ : 



3 



To 

My American Associates 

And to My Colleagues in the 

Allied and Associated Governments 

at the Peace Conference 

In Remembrance 

of days 

crowded with vital endeavor 

in which they labored with 

a common purpose 

to compose 

the affairs of a troubled icorld 

I dedicate this volume 



ACKNOWLEDQMENT 

In the writing of this book 
I have been indebted for ad- 
vice and assistance to many 
of my American colleagues 
associated with me in the 
matters with which I deal 

B. M. B. 



CONTENTS 

PAGE 

Introduction 

How the Reparation Clauses Were Formed .... 13 

Drawing the Economic Clauses *' 

Reparation Clauses 125 

Economic Clauses 1 °^ 

Appendix *°° 

Index 345 



INTRODUCTION 



INTRODUCTION. 

The Human Equation in the Making op the 

Peace Treaty. 

Much misconception exists and many misstate- 
ments of fact have been made regarding the repara- 
tion and economic sections of the Treaty of Peace 
— clauses vital to the interest of the American peo- 
ple and even more vital to world stability. As 
I was intimately concerned with the creation of 
these sections, my purpose herein is to set forth 
the problems which the writers of the sections had 
to meet and why they met them as they did rather 
than in the various ways suggested by present-day 
critics. 

Before, however, the subject matter of the 
clauses in question is presented to the reader, it is 
essential that he should have a mental picture of 
the conditions under which they were brought into 
being. 

The mightiest conflict of mankind had just come 
to an end. The cannon's sound had but lately died 
away ; the shock of battle was still upon the world ; 
the aroused primitive passions of nations and of 
men had only in a small measure subsided; the 
world's wounds still bled. 

Within a few hours' travel from the Peace Con- 
f fence were the battlefields upon which lay 
900,000 dead Englishmen and colonials; 1,300,000 



The Making of the Reparation and 

dead Frenchmen; and the bodies of hundreds of 
thousands of other Allies. On these fields had been 
sustained the grievous wounds of many millions of 
living men. 

From wantonly devastated France had not de- 
parted the fear and inherent hatred of the enemy 
who but a few months before had pierced almost to 
her heart — the traditional enemy who had brought 
upon her the bitter days of 1870. With the World 
War already history, the shadow of the Prussian 
still hung over the Republic. France was lixed in 
her determination to erect an impregnable wall, 
economic or geographical, or both, against future 
German invasion. This, in greater or lesser meas- 
ure, was the attitude of the other Allies. 

Outraged Belgium was no less outraged, no 
less fearful. England and her colonies, that with- 
out stint had given of their best in men and the 
bedrock resources of au empire, trembled from 
their four years' travail. Italy, shaken and de- 
pleted by her long-sustained efforts, had barely es- 
caped the German heel. Of the smaller Allies, 
Serbia, Rumania, and Poland had been the victims 
of merciless German aggression. All of the Allies 
and Associated Governments were bending under 
the cumulative burdens that had been the price of 
victory. 

In France alone there was not a home that had 
not been seared by the baleful touch of modern 
war — a terrible, irrevocable fact in substance 
true of the other Allied countries. Not only in 
millions of homes had the breadwinner or the son 



Economic Sections of the Treaty 

been annihilated, but many homes after the war 
held pitiful shattered fragments of once sturdy 
men, now become the apotheosis of living death. 

France came out of the conflict with 1,700,000 
wounded men. Their presence kept the memory of 
the war a fiercely burning flame, to which the power- 
ful emotion of vengeance but added fuel. Facts 
such as these do not make for cool reasoning; they 
make for irresistible and elemental human reac- 
tions. They had to be reckoned with at Paris. They 
have to be reckoned with now. 

Without exception, the late antagonists of Ger- 
many were facing almost unbelievable financial con- 
ditions, seemingly impossible of solution without 
crushing their whole economic and industrial 
existence. In order to meet, to grapple with, and 
to remedy these conditions, they would have to re- 
sort to taxation methods that appeared humanly 
out of the question to endure, to drastic readjust- 
ments of the entire fabric of their national life. 

Eelief from this burdensome taxation had been 
promised from time to time by the leaders in the 
various countries. These promises in many in- 
stances were based upon false and exaggerated 
ideas of Germany's capacity to pay. 

Further, one must realize the impaired and in 
many instances destroyed economic life of the 
Allied Powers — a depletion and destruction which 
made the ensuing burdens seem impossible. Ger- 
many had swept over Belgium and northern 
France. She had ruined mines ; she had destroyed 
factories or removed machinery ; she had devastated 






The Making of the Reparation and 

homes and farms; and she had either appropriated 
to her own purpose or driven away domestic ani- 
mals. 

Wherever, on land or on sea or in the air, the 
German power had been exercised, it had left an 
aftermath of misery or bitterness or hate. 

Public opinion in the various Allied and Asso- 
ciated countries had been aroused to a "white 
heat of fear, hatred, and distrust. Facing these 
facts, one can easily realize the impossibility of ar- 
riving at a treaty free from passion and a sense 
of wrong. 

The Allied leaders had agreed to a peace 
upon the basis of President Wilson's address 
of January 8, 101S (containing the Fourteen 
Points) and the principles of settlement enunciated 
in his subsequent addresses. These principles had 
been formulated not in the interest of Germany, 
but to promote the real interest of the Allies them- 
selves and to advance the cause of world peace and 
future security. Nevertheless, at an election held 
after the armistice and agreement as to the basic 
terms of peace, tin 1 English people, by an over- 
whelming majority, returned to power their Prime 
Minister on the basis of an increase in the severity 
of these terms of the peace, especially those of 
reparation. 

The French position, as evidenced by the expres- 
sions of the press of all political parties and by the 
speeches of the Deputies, showed an equally exact- 
ing attitude as to reparations. The apparently 
unanimous sentiment of the French people was 



Economic Sections of the Treaty 

perhaps typified in the placards which, during 
the days of the Peace Conference, covered the 
walls of Paris and of other cities, proclaim- 
ing, Que UAllemagne paye d'abord (Let Ger- 
many pay first). The French. Government, in fact, 
found it impossible during the months following the 
armistice to secure the adoption of any immediate 
taxation measures by the Chamber of Deputies. 
This body very justly insisted that the burdens of 
the war should in the first instance be assumed 
by Germany. 

No one can understand the peace treaty who 
does not know and cannot measure the human con- 
ditions under which it was brought forth. It is 
singular but true that peace seemed very beautiful 
during the war, but almost hateful when the war 
ended. From a superficial survey of the conditions 
that prevailed at the Peace Conference, one would 
have been quite justified in assuming that many of 
the participants preferred war with all its horrors 
to any peace short of that which they demanded. 
Their demands had their genesis in deep-rooted and 
almost ineradicable hatreds and in the insistent 
desire for iself-protection against future danger. 

Not a few among the Allies were so intent 
upon momentary gains as to imperil the en- 
tire structure of world-peace, which after all 
was the real purpose of the Conference. Though 
the peace delegates individually were able and 
high-minded, they were bound to the wheel of 
their national aspirations. Therefore they were un- 
able or unwilling to yield on questions that con- 



The Making of iJie Reparation and 

cerned their ovn national advantages or safeguards 
against future German aggressions. 

If the ideal peace, which some demand, had been 
actually undertaken, with all that it seemingly in- 
volved of sacrifice and unselfishness, the result 
would have been the overthrow of at least three of 
the major governments. It would have been fol- 
lowed further by the substitution of other repre- 
sentatives who would have come into power under 
a popular mandate requiring them to be even more 
cxaiting in their terms. 

I call attention to the record on this point, which 
shows that approximately three hundred members 
of the House of Commons addressed a telegram to 
the British Prime Minister demanding fulfillment 
of the terms promised in the khaki campaign 
pledges and requiring him to proclaim his inten- 
tions. So compelling was the despatch that he was 
under the necessity of returning to London to re- 
assure the House of his intention to insist upon 
exacting fullest compliance with the demands that 
had been formulated in the heat of war passion and 
during the excitement of a general election. 

For further example, Premier Hughes of the 
Australian Commonwealth insisted that everv 
Australian who had placed a mortgage on his house 
to buy a Avar bond was as definitely entitled to rep- 
aration as was every Frenchman whose house had 
been burned by the Germans. 

These two examples are concrete indications of 
the conditions with which the writers of the repara- 
tion clauses had to contend. A different story might 

G 



Economic Sections of the Treaty 

have been told and «a different treaty written if 
some of the critics had had the courage, clarity, and 
force to impress their present-day views upon their 
own representatives at Paris. But the Americans 
and others had the charity to remember that the 
horrors of war were still heavy upon the world. 
Try as men might, and I submit that they did try, 
the spirit of vengeance or of selfish advantage could 
not be entirely eradicated from the minds of the 
framers of the treaty. On them the pressure of 
public opinion in their respective countries was 
being constantly exerted. 

In the reparation clauses, the Conference was 
not writing a mere contract of dollars and cents ; it 
was dealing with blood-raw passions still pulsing 
through the people's veins. It was impossible, I 
repeat, to ignore the human factors, but provision 
was made whereby they could be reduced or elimi- 
nated later and whereby the Reparation Commis- 
sion in the processes of enforcement might become 
a flexible instrument of wisdom and justice. 

There are cross-currents in the tides of circum- 
stance against which principles and men, no matter 
how strong they may be, are at times unable to 
make headway. These cross-currents may have 
their rise in great passions that cannot be stilled 
until they have run their course. It would be 
idle to assert that the atmosphere in which the 
Treaty of Versailles was made was free from enmity 
and vengeance; it would be transcending human 
nature if such were the case. 

The treaty was made in the still smouldering 



The Making of the Reparation and 

furnace of human passion. It could not have boon 
otherwise. The memory of the millions of dead and 
wounded, of property and homos ruthlessly, wan- 
tonly, ami methodically destroyed, and of the hid- 
eousness of the warfare but recently ended, ma 
it necessary to face the impossibility of arriving at 
a fully idoal treaty. But stops are provided in the 
olastio mechanism of the Reparation Commission 
which "will enable us, in the calmer days to come, 
to climb nearer to perfection, 

1 believe that every fair-minded man who can 
speak familiarly on the subject will agree that the 
repression and minimizing of the vengeful elements 
in the treaty wore due in largest measure to Wo 
row ^ ilson and the high purposes he set for 
ultimate attainment The treaty may not embrace 
all he desired, but 1 believe that .it embodies all 
that could have boon obtained. 

It is a fundamental mistake to assume that the 
treaty ends where i: really begins. The signing of 
the document on June 28, L919, at Versailles did 
not complete its history: it really began it. / 
measure of its worth lies in the pn m s -e- 

cution and the \ irit in which it is carried out 
all of the - -tract. 

It is true that the treaty is a severe treaty. The 
only question in dispute is: Poos it embody the 
best attainable justice and wisdom? 

1 affirm that the problems presented a: Paris 
which 1 here diseuss wove dealt with as effectively 
as possible at the time. If it were impossible to 



Economic Sections of the Treaty 

secure a treaty which was other than a human docu- 
ment, a method, however, was provided for remov- 
ing later the obstacles (hat at Paris proved to be 
insurmountable. I am confident that in the Repara- 
tion Commission there was created a flexible instru- 
ment qualified to help effectuate a just, and proper 
peace, it' that desire and purpose be really present. 
When the world more Cully and humanely under- 
stands and measures the problems in question, they 
can be soberly and wisely resolved. 

If we so will it, there is that in the treaty which 
enables us to look forward with hope instead of 
backward with hate. 



NOTE 

It should be said that in the pages to follow I 
address myself only to those matters with which I 
was directly concerned in the making of the treaty. 
Where reference is made to the treaty, I have 
specifically in mind the reparation and economic 
sections. 

It should be said further that I alone am respon- 
sible for the statements made in this volume. 



HOW THE REPARATION CLAUSES 
WERE FORMED 



For purposes of specific reference, the reparation 
and economic section* of the treat 11, with marginal 
explanatory notes, have been reprinted verbatim at 
the back of this book. The reader will find the 
marginal notes of value in liis scrutiny of the 
clauses. The marginal notes to the reparation 
clauses have been prepared especially for this 
volume. Those for the economic clauses appear 
substantially as they were written when the clause* 
were drawn. The notes to the economic clause*, 
particularly, illustrate the manner in winch the 
momic Commission kept itself informed as to 
the progress of its work. 



I. 

Bow THE Reparation Clauses Were Formed. 

At a plenary meeting of the Peace Conference 
held on the 25th of January, 1919, it was decided 
to apportion among various commissions the sev- 
eral subjects <<> be dealt with. 

These commissions operated under the general 
direction of the Council of Ten composed of the 
chiefs of the delegations of the five principal 
Allied and Associated Powers and their Ministers 
of Foreign Affairs. 1 

Among the bodies thus established was the Com- 
mission on Reparation, which was charged by the 
Conference with examining into and reporting on 
(1) the amount which the enemy countries ought 
to pay by way of reparation; (2) what they were 
capable of paying, and (3) by what method, in 
what form, and within what time payment should 
1k3 made. 

The members of this commission and the nations 
which they represented were as follows : 

United States of America: 

Mr. Bernard M. Baruch, Chairman of the United States 

War Industries Board. 
Mr. Norman H. Davis, Commissioner of Finance. 



lSubsequently the Council of Ten was replaced by a Coun- 
cil of Four, composed of the heads of state of the 
United States, of Great Britain, of France, and of Italy. 
This Council was otherwise known as the Supreme 
Council or the Big Four. 

15 



The Making of the Reparation and 

Mr. Vance C, McCormick, Chairman of the War Trade 
Board. 

Mr, Jerome Greene, Secretary, 

British Empire : 

The Rt. Hon. \v. M. Hushes, Prime Minister of Australia. 
The Rt, Hon. Lord Sumner of ibstone, Lord of Appeal in 

Ordinary. 
The Rt. Hon. Lord Cunliffe, Former Governor of the Bank 
of England. 

Mr. Dudley Ward, of the British Treas- 
ury, Secretary. 

France : 

M. L. L. Kiot.-. Minister of Finance, 

M, Loucheur, Minister of industrial Reconstruction, 

M, Albert l.obrun. Minister of Liberated Districts. 

M. Cheysson, Inspector of Financ 
Secretary. 

Italy: 

M. Salandra, Deputy, former President of the Ministerial 

Council. 
M. Eugenio Chiesa, Deputy. 
M. d'Ameiio, Counselor of the Supreme Court. 

M. Foberti, Chief of Section, Ministry 
of the interior, Secretary. 

Belgium: 

M. Van den lleuvel, Minister of State. 
M. Despret, Supreme Court; Director of the Bank of 
Brussels. 

M. Bourquin, Professor at University 
of Brussels. Judicial Consul for the 
Ministry of Affairs, See; eta 

Greece : 

M. Romanes. Special Envoy and Minister Plenipotentiary 

to Paris. 
M. Michalacopoulos, Minister of State. 

M. Speransa, Director of Ministry of For- 
eign Affairs, Secretary. 

16 



Economic Sections of the Treaty 

Poland : 

M. Olchowski, Director of Department of War Indemni- 
ties at the Ministry of Finances. 
M. Chamiec, Director of the National Loan Bank. 
M. Zalewski, Secretary. 

Portugal : 

M. Egaa Moniz, Minister of Foreign Affairs. I 

M. Freire d'Andrade, Professor of the Faculty of Sciences, 

former Minister of Foreign Affairs. 

M. Joao de Bianchi, Secretary. 

Japan : 

M. Kengo Mori, Financial Agent in the Japanese Em- 

bassy at London and Paris. 
M. IT. Nagaska, Councilor of the Japanese Emhassy in 

Paris. 
M. K. Tatsumi, Director of the Specio Bank of Yokohama. 
M. K. Aokl, Secretary. 

Rumania : 

M. Danielopol, Envoy Extraordinary and Minister from 

the King to Washington; former Director of the 
National Bank of Rumania; former Deputy. 
M. Zahariade, Civil Engineer, Inspector General, Assist- 
ant Director of Railroads, Member of Upper Board of 
Public Works. 

M. Misu, Secretary. 

Serbia : 

M. Stoyanowitch, Deputy, former Minister. 

M. Miloch Savtchitch, former Minister. 

M. Drag-Doutschitch, Secretary. 

Czechoslovak Republic : 

M. Benes, Minister of Foreign Affairs. 

M. Osuski, Charge d'Affaires. 

M. Slavick, Secretary. 



iReplaced by Mr. Alfonso Costa, after the meeting of March 
11, 1919. 

17 



The Making of the Reparation and 

Mr. Klotz, the French Minister of Finance, was 
chosen chairman of the commission and Mr. W. H. 
Hughes, Prime Minister of Australia and Mr. Van 
den Henvel of Belgium, vice-chairmen. 

The American representatives selected as their 
legal adviser John Foster Dulles, an international 
lawyer, who had had experience in several inter- 
national conferences. Later on Thomas TV. La- 
mont, a representative of the United States Treas- 
ury, was named as au alternate to Korman Davis. 
The American committee was assisted by a corps 
of experts, who had previously made an in- 
tensive field examination beginning immediately 
with the conclusion of the armistice. This group 
contained General McKinistry, Colonel Dillon, 
Leland L. Summers, and other engineers. Thev 
were assisted and advised by Prof. Allyn Young. 
Jerome D. Greene became the secretary of the 
American delegation and of the Interallied Repara- 
tion Secretariat. 

The first meeting of the Commission on Repara- 
tion was held on Monday, February 3, 1919. It was 
then decided that the commission should proceed to 
consider the principles of reparation, and each, of 
the nations represented on the commission was in- 
vited to file a statement of the principles as con- 
ceived bv it. 
y The American reparation delegates approached 
their task with a fairly definite program. As to the 
actual physical damage wrought by Germany, their 
knowledge probably surpassed that of any other 
delegation. This was the result of field exanrina- 

18 



Economic Sections of the Treaty 

tions which had been conducted by a number of the 
experts referred to above immediately at the conclu- 
sion of the armistice. 

The American principles were based on pre- 
armistice negotiations as to what were to be 
the "terms of peace." President Wilson in his 
Fourteen Points had originally stipulated for 
healing acts to repair the structure and validity 
of international law and for the restoration of in- 
vaded areas. Before accepting these terms the 
Allies stated that by restoration they understood 
"that compensation will be made by Germany for 
all damage done to the civilian population of the 
Allies and their property by the aggression of Ger- 
many, by land, by sea, and from the air." 

This interpretation had been accepted by the 
United States and by Germany. Accordingly, the 
American delegates prepared and filed with the 
reparation section of the Peace Conference a state- 
ment of reparation principles which involved: 

(1) That Germany make good the damage resulting 
directly from acts clearly in violation of international law, 
such as the breach of the Treaty of Neutrality in favor of 
Belgium, illegal treatment of prisoners of war, etc. 

(2) That Germany make good her pre-armistice agree- 
ment as to compensation for all damage to the civilian 
population and their property, this being construed by the 
American delegation to mean direct physical damage to 
property of non-military character and direct physical injury 
to civilians. 

The American delegation was the only one to pre- 
sent any definite scheme of reparation. The other 

3 19 



The Making of the Reparation and 

delegations merely filed general statements to the 
effect that the war being a wrongful act by Ger- 
many, Germany was responsible for all the loss and 
damage, direct and indirect, which resulted there- 
from. 

One of the Allies went even further and made 
claim for loss and damage resulting from the fact 
that the armistice was concluded so unexpectedly 
that the termination of hostilities involved it in 
financial losses. In no statement of principles 
other than that of tbe United States was any refer- 
ence made to the pre-armistice negotiations as a 
foundation for, or limitation of, the Allies' rights 
to reparation. 

The American program, as the most concrete and 
flefinite, at once became the basis of discussion. 
During several weeks of debate, it was subjected 
to the criticism of the other delegations, all of 
which, with the exception of the Belgian delega- 
tion, which was acquiescent, took strong exception 

to it. J 
/ 

Damage vs. War Costs. 

The American contention was that. we. did not 
have a piece of plain, white, unscratched paper 
upon which to write the treaty, but that there 
already was written upon it, because of the ac- 
ceptance of the Fourteen Points, a limitation which 
stated that only reparation of damage should be 
collected, and not the costs of the war. 

The argument in favor of war costs was led by 
the British delegation, comprising Mr. Hughes, 

20 



Economic Sections of the Treaty 

Premier of Australia, Lord Sumner, and Lord Cun- 
liffe. It was natural that the British should have 
vigorously supported the inclusion of war costs. 

Mr. Lloyd George had just been re-elected to 
power on a platform of collecting from Germany 
the costs of the Avar, "shilling for shilling, and ton 
for ton." The American program absolutely op- 
posed this, and would have brought little repara- 
tion to the British dominions. That for Great 
Britain would have been limited to shipping losses 
and damages from aerial raids. 

Although the attitude of Great Britain was thus 
quite natural, it was somewhat surprising that she 
was able to rally to her program France, Serbia, 
and other nations which had suffered substantial 
material damage. In accordance with the calcula- 
tion of the American experts, the American pro- 
gram of reparations would have led to payments 
by Germany being apportioned among the Allied 
Powers somewhat as follows: 

France 43 per cent. 

British Empire 19 " 

iBelgium 24 " 

Italy 6 " 

Serbia 4 " 

Rumania 3 " 

Scattering 1 " 

Under the British scheme of inclusion of war 
costs, the proportion would have been somewhat as 

iThis relatively high percentage for Belgium is due to the 
exceptional position of Belgium as regards war costs 
which was provided for in the American program. 

21 



The Making of the Reparation and 

follows (the figures as a basis are very rough calcu- 
lations, but will serve to illustrate the poiut) : 

France 2 4 per cent. 

British Empire 40 " " 

Belgium 1 7/10 " 

Italy C 

Serbia 1 3/10 " 

United States 25 

Scattering 2 " " 

It was obvious, therefore, that the American pro- 
posa] was the more advantageous for the chief 
sufferers from the war unless Germany could pay a 
principal capital sum largely in exeess of that re- 
quired, in accordance with the American program, 
to make good actual physical damage, personal in- 
jury to civilians, etc. The Americans stressed the 
fact that Germany's capacity of payment could 
scarcely extend appreciably beyond that needed to 
meet the American program. Nevertheless the dele- 
gations of France, Serbia, and to an extent even of 
Belgium, did not openly espouse this program, 
which afforded them a particularly favorable posi- 
tion, chiefly because the program seemed to in- 
volve a sparing of Germany against which their 
public opinion revolted. 

It is but fair to say that the arguments pre- 
sented by the English and French delegations, 
which were more active than others, Avere based 
upon cogent reasons. The English contention, of 
course, was influenced by the mandate that had been 
given by their people in the election following the 
armistice. As a legal basis for this claim the Brit- 



Economic Sections of the Treaty 

ish contended that they had agreed to make peace 
not merely on the President's Fourteen Points, but 
upon the principles enunciated in his subsequent 
addresses. They further contended that among 
these principles was the declaration that the settle- 
ment should be based on the justice of each item of 
the treaty. 

Mr. Hughes in particular argued with force that 
the reparation clauses of the treaty would not be 
just unless they provided an adequate reparation 
for the heavy losses in blood and treasure which 
had been incurred by the British, dominions, 
even though these dominions had been spared 
from actual physical destruction. He was ear- 
nestly supported by Lord Sumner, one of the 
recognized leading jurists of Great Britain. Both 
Mr. Hughes and Lord Sumner also likened the 
situation of Great Britain to that of Belgium, on 
the ground that Great Britain's war costs had re- 
sulted from Germany's breach of the Treaty of 
Neutrality of Belgium, to which treaty Great 
Britain was a party. 

The French argument in favor of the inclusion 
of war costs was based on the terms of the signed 
armistice agreement of November 11, 1918. This 
agreement contained the following clause : 

Nineteen. — With the reservation that any future claims 
and demands of the Allies and the United States of America 
remain unaffected, the following financial conditions are 
required: Reparation for damage done. 

This clause was followed by provisions respecting 
German public securities, Russian and Rumanian 

23 



The Making of the Reparation and 

gold, etc. It was the French claim that this gen- 
eral reservation occurring subsequently to the dis- 
cussions between the Allies, the United States, and 
Germany as to the terms of peace left the Allies 
free to present any claim for reparation which they 
saw fit. 

In contending against these points the Americans 
urged that the specific declaration of the Allies re- 
lating particularly to the question of the amount 
of compensation to be paid by Germany was bind- 
ing as against general statements, contained in the 
President's addresses. These statements had not 
been definitely const rued. They urged additionally 
that the pre-armistice negotiations as to the terms 
of peace which had been conducted by the heads of 
the Allied states were not subject io modification 
by the terms o[' the armistice agreement of Novem- 
ber 11, L918. The latter was a military document 
designed only to insure the Allies being in a posi- 
tion to enforce the peace arrangements previously 
entered into. 

The texts of the opening and closing addresses 
of Mr. Dulles and addresses by Mr. Hughes and Mr. 
Klotz a. re contained in the addenda to this volume. 
A reading ol' the arguments will give an apprecia- 
tion of the difficulties inherent in the solution of 
these problems, as well as of the vigor with which 
the conflicting viewpoints were urged. 

The debate which the American program had 
evoked did in fact impress the other delegates. 
They could not, however, bring themselves to adopt 
this program. The American delegation thereupon 

21 



Economic Sections of the Treaty 

proposed that the question of the inclusion of war 
•costs be referred without prejudice to the Supreme 
Council. Mr. Hughes, earnest and sincere, fight- 
ing to the last for war costs, attempted to force a 
vote prior to this reference to the Supreme Council. 
He "wais confident that this would have shown the 
American delegation as a minoritv of one. 

However, the motion for a vote was lost, and 
the matter was referred to the Supreme Coun- 
cil without a record of the decision of the 
delegations upon the question. After this ac- 
tion, taken in accordance with the American 
suggestion, the formulation of the reparation 
clauses of the treaty passed from the reparation 
section of the Peace Conference and became sub- 
ject to the direct treatment of Mr. Wilson, Mr. 
Lloyd George, Mr. Clemenceau, and Mr. Orlando, 
with their several technical advisers. 

President Wilson was on the ocean returning to 
America when the Supreme Council first took into 
its hands the problem of reparations. The Amer- 
ican delegation had, however, presented to the 
President by wireless a full and impartial report 
of the divergent points of view. They requested 
his instructions as to whether they should persist 
in their original attitude with reference to war 
costs. 

The President replied to the effect that the 
American delegation should dissent, and if neces- 
sary dissent publicly, from a procedure which "is 
clearly inconsistent with what we deliberately 
led the enemy to expect and cannot now hon- 

25 



The Making of the Reparation and 

orably alter simply because we have the 
power." 

Fortified by this vigorous support from the Presi- 
dent, the American delegates, in informal confer- 
ence, were able shortly to secure the acquiescence 
of Mr. Lloyd George, Mr. Clemenceau, and Mr. 
Orlando in the fundamental principle originally 
enunciated by the American delegation. This 
was that Germany's reparation obligations were 
to be determined in accordance with a fair con- 
struction of the Allies' pre-armistice declaration 
and that such construction excluded imposing upon 
Germany the "costs of the war." but was limited 
to what may be called actual damage. 

There remained to be settled precisely what 
should be considered as damage as distinct from 
war costs. After considerable discussion and de- 
bate, the thirty-one categories of damage which had 
been reported by the Commission on Reparation 
were reduced to ten (see page 32). On these 
there was general agreement except as to pensions 
and separation allowances. 1 The inclusion of these 
items was vigorously urged by all the Allies, partic- 
ularly Great Britain and France. With the aban- 
donment of general war costs, these items afforded 
the only remaining basis for a large financial com- 
pensation from Germany for the tremendous sacri- 
fices in blood and treasure which had been made by 
the British Empire. The French were insistent in 



iBy separation allowances is meant pay by the governments 
to families and relatives who normally depended for 
their support upon persons in military service. 

26 



Economic Sections of the Treaty 

view of the demands of their people that Germany 
should pay and thus relieve this sorely tried people, 
who have suffered more than the world probably 
will ever realize. 1 / 

Unless the French delegates w r ere firmly con- 
vinced of Germany's ability to pay considerably in 
excess of a capital sum of $15,000,000,000, it is 
difficult to understand their acceptance of the in- 
clusion of pensions and separation allowances in 
the categories which Germany had to pay. It was 
forcibly brought to their attention that probably 
Germany could not pay much more than a capital 
sum of $15,000,000,000. Hence, if pensions and sep- 
aration allowances were included in the bill pari- 
passu with the other categories, France would not 
receive so large an amount as if these items were 
left out. 

Without pensions and separation allowances, the 
bill against Germany was estimated to be approxi- 
mately $15,000,000,000, which it was generally 
thought she could pay. France would have re- 
ceived full payment for her devastated areas. With 
the inclusion of pensions and separation allow- 
ances without a priority for the devastated areas, 
France would have a larger bill to present, but 



lMy first-hand observations of the unnecessary destruction 
in Belgium and France has convinced me that the 
devastated areas of Belgium, France, Italy, Poland, 
Serbia and Rumania should receive preferred consid- 
eration. The loss of cattle to a peasant means at least 
as much to him as does the loss of a ship to a great 
merchant. 

21 



The Making of the Reparation and 

would receive a less sum of money than if she had 
excluded these items. On the other hand, England 
and her dominions would get more. 

Sooner or later, if the amount of Germany's in- 
debtedness is fixed at about a capital sum of $15,- 
000,000,000, France must insist either upon a 
priority for her devastated areas or a larger per- 
centage than her claims under the categories would 
entitle her to; otherwise she will lose out. 

There was a division among* the American 
delegation which made it frankly hesitant between 
maintaining on the one hand its original strict and 
possibly legalistic construction of the pre-armistice 
declaration (which would have excluded pensions 
and separation allowances), and supporting on the 
other hand a liberal construction which would ad- 
mit, the right of compensation for damage to the 
homes and families behind the front as well as dam- 
age to Hie houses at the front. 

Some advanced the principle that financial loss 
resulting from the absence of a wage earner did 
not cause any more "damage to the civilian popu- 
lation" than did an equal financial loss involved 
in the payment of taxes to provide military equip- 
ment and like war costs. On the other hand, 
it would not be easy to meet the contention that 
Germany should be liable for compensation not 
merely for damage to the buildings upon which 
civilians depended for housing, but also for injury 
or loss of life of those upon whom the civilians de- 
pended for support. Payment for a destroyed 
chimney was not to be placed above compensation 

28 



Economic Sections of the Treaty 

for a lost life or a pension for a blinded or wounded 
soldier. 

In addition, it was argued that the inclusion of 
these terms would not increase the amount which 
Germany Avould pay. Her debit without them would 
amount to all that she could pay as a capital sum. 
It was urged that it merely changed the propor- 
tion of the distribution of collections among the 
Allies on what seemed to them to be a more equit- 
able and satisfactory basis. 

The final argument that won the unanimous 
approval of what was known as the Big Four was 
a memorandum submitted by General Smuts. He, 
as is well known, was one of the most liberal and 
courageous men at the Peace Conference. This 
memorandum read as follows : 

NOTE ON REPARATION. 

The extent to which reparation can be claimed from 
Germany depends in the main on the meaning of the last 
reservation made by the Allies in their note to President 
Wilson, November, 1918. That reservation was agreed to by 
President Wilson and accepted by the German Government 
in the armistice negotiations, and was in the following 
terms: 

"Further, in the conditions of peace laid down in his 
address to Congress on January 8, 1918, the President 
declared that invaded territories must be restored, as 
well as evacuated and made free. The Allied Govern- 
ments feel that no doubt ought to be allowed to exist 
as to what this provision implies. By it they under- 
stand that compensation will be made by Germany for 
all damage done to the civilian population of the 

29 



The Making of the Reparation and 

Allies and to their property by the aggression of Ger- 
many by land, by sea, and from the air." 

In this reservation, a careful distinction must be made 
between the quotation from the President, which refers to 
the evacuation and restoration of the invaded territories, 
and the implication which the Allies find in that quotation 
and which they proceed to enunciate as a principle of gen- 
eral applicability. The Allies found in the President's pro- 
vision for restoration of the invaded territories a general 
principle implied of far-reaching scope. This principle is 
that of compensation for all damage to the civilian popula- 
tion of the Allies in their persons or property, which re- 
sulted from the German aggression, and whether done on 
land or sea or from the air. By accepting this compre- 
hensive principle (as the German Government did), they 
acknowledged their liability to compensation for all damage 
to the civilian population or their property wherever and 
however arising, so long as it was the result of German 
aggression. The President's limitation to restoration of the 
invaded territories only of some of the Allies was clearly 
abandoned. 

The next question, is how to understand the phrase 
"civilian population" in the above reservation, and it can 
bo most conveniently answered by an illustration. A shop- 
keeper in a village in northern France lost his shop through 
enemy bombardment, and was himself badly wounded. He 
would be entitled as one of the civilian population to com- 
pensation for the loss of his property and for his personal 
disablement. He subsequently recovered completely, was 
called up for military service, and after being badly wounded 
and spending some time in the hospitals was discharged as 
permanently unfit. The expense he was to the French Gov- 
ernment during this period as a soldier (his pay and main- 
tenance, his uniform, rifle, ammunition, his keep in the 
hospital, etc.) was not damage to a civilian, but military 
loss to his Government, and it is therefore arguable that 
the French Government cannot recover compensation for 

30 



Economic Sections of the Treaty 

such expense under the above reservation. His wife, how- 
ever, was, during this period, deprived of her bread-winner, 
and she therefore suffered damage as a member of the 
civilian population, for which she would be entitled to 
compensation. In other words, the separation allowances 
paid to her and her children during this period by the 
French Government would have to be made good by the 
German Government, as the compensation which the allow- 
ances represent was their liability. After the soldier's dis- 
charge as unfit, he rejoins the civilian population, and as 
for the future he cannot (in whole or in part) earn his 
own livelihood, he is suffering damage as a member of the 
civilian population, for which the German Government are 
again liable to make compensation. In other words, the 
pension for disablement which he draws from the French 
Government is really a liability of the German Government, 
which they must under the above reservation make good to 
the French Government. It could not be argued that as he 
was disabled while a soldier he does not suffer damage as a 
civilian after his discharge if he is unfit to do his ordinary 
work. He does literally suffer as civilian after his dis- 
charge, and his pension is intended to make good this dam- 
age, and is therefore a liability of the German Government. 
If he had been killed in active service, his wife as a civilian 
would have been totally deprived of her bread-winner, and 
would be entitled to compensation. In other words, the 
pension she would draw from the French Government would 
really be a liability of the German Government under the 
above reservation, and would have to be made good by them 
to the French Government. 

The plain, common-sense construction of the reservation 
therefore leads to the conclusion that, while direct war 
expenditure (such as the pay and equipment of soldiers, the 
cost of rifles, guns, and ordinance and all similar expendi- 
tures) could perhaps not be recovered from the Germans, 
yet disablement pensions to discharged soldiers, or pensions 
to widows and orphans, or separation allowances paid to 
their wives and children during the period of their military 

31 



The Making of the Reparation and 

service are all items representing compensation to members- 
of the civilian population for damage sustained by them, 
for which the German Government are liable. What was 
spent by the Allied Governments on the soldier himself, or 
on the mechanical appliances of war, might perhaps not be 
recoverable from the German Government under the reserva- 
tion, as not being in any plain and direct sense damage to 
the civilian population. But what was, or is, spent on the 
citizen before he became a soldier or after he has ceased to 
be a soldier or at any time on his family, represents com- 
pensation for damage done to civilians and must be made 
good by the German Government under any fair interpreta- 
tion of the above reservation. This includes all war pen- 
sions and separation allowances, which the German Govern- 
ment are liable to make good, in addition to reparation or 
compensation for all damage done to property of the Allied 
peoples. 

(Signed) J. C. Smuts. 
Pari., March 31, 1919. 



Categories. 

It thus having been decided to include pensions 
and separation allowances, the categories of dam- 
age for which Germany is held responsible were 
finally formulated as follows: 

Compensation may be claimed from Germany under Arti- 
cle 2 32 above in respect of the total damage under the fol- 
lowing categories: 

(1) Damage to injured persons and to surviving depend- 
ents by personal injury to or death of civilians caused by 
acts of war, including bombardments or other attacks on 
land, on sea, or from the air, and all the direct conse- 
quences thereof, and of all operations of war by the two 
groups of belligerents wherever arising. 

32 



Economic Sections of the Treaty 

(2) Damage caused by Germany or her allies to civilian 
victims of acts of cruelty, violence or maltreatment (in- 
cluding injuries to life or health as a consequence of 
imprisonment, deportation, internment or evacuation, of ex- 
posure at sea or of being forced to labour), wherever aris- 
ing, and to the surviving dependents of such victims. 

(3) Damage caused by Germany or her allies in their 
own territory or in occupied or invaded territory to civilian 
victims of all acts injurious to health or capacity to work, 
or to honour, as well as to the surviving dependents of 
such victims. 

(4) Damage caused by any kind of maltreatment of 
prisoners of war. 

(5) As damage caused to the people of the Allied and 
Associated Powers, all pensions and compensation in the 
nature of pensions to naval and military victims of war 
(including members of the air force), whether mutilated, 
wounded, sick or invalided, and to the dependents of sucn 
victims, the amount due to the Allied and Associated Gov- 
ernments being calculated for each of them as being the 
capitalized cost of such pensions and compensation at the 
date of the coming into force of the present Treaty on 
the basis of the scales in force in France at such date. 

(6) The cost of assistance by the Government of the 
Allied and Associated Powers to prisoners of war and to 
their families and dependents. 

(7) Allowances by the Governments of the Allied and 
Associated Powers to the families and dependents of mobi- 
lised person or persons serving with the forces, the amount 
due to them for each calendar year in which hostilities oc- 
curred being calculated for each Government on the basis 
of the average scale for such payments in force in France 
during that year. 

(8) Damage caused to civilians by being forced by Ger- 
many or her allies to labour without just remuneration. 

33 



The Making of the Reparation and 

(9) Damage in respect of all property wherever situated 
belonging to any of the Allied or Associated States or their 
nationals, with the exception of naval and military works 
or materials, which has been carried off, seized, injured or 
destroyed by the acts of Germany, or her allies on land, on 
sea or from the air, or damage directly in consequence of 
hostilities or of any operations of war. 

(10) Damage in the form of levies, fines and other simi- 
lar exceptions imposed by Germany or her allies upon the 
civilian population. 



Special Provisions For Belgium. 

There remained, as a question of principle, the 
special position for Belgium which the American 
memorandum had originally proposed. All of the 
principal Allied and Associated Powers, having ac- 
cepted the view that their own claims to recovery 
of war costs should be renounced, were reluctant to 
admit an exceptional position for Belgium — a posi- 
tion which, however sound in international law, 
would be difficult to explain to their own people. 
The American experts had filed with the Supreme 
Council a formal reservation of the rights of 
Belgium as construed by the United States. The 
representatives of Belgium were encouraged by 
American sympathy and by the stand of the Presi- 
dent. They finally secured provisions for compen- 
sating Belgium for the entire loss to which she had 
been subjected as a result of Germany's violation 
of the Treaty of Neutrality. 

A further special measure in aid of Belgium was 

34 



Economic Sections of the Treaty 

adopted at the same time. The general principle 
accepted fry the Allied and Associated Powers was 
that they would share in Germany's reparation 
payments in proportion to their allowed claims. 
To permit the immediate restoration of Belgium 
it was, however, felt equitable to accord to 
Belgium a certain priority in time of payment. An 
arrangement was accordingly entered into whereby 
Belgium will receive, on account of the reparation 
payments to which she is entitled, the equivalent 
of 2,500,000,000 gold francs, as preferred payment 
out of the first cash, securities, and deliveries in 
kind received from Germany pursuant to the 
Treaty of Peace. 

A final principle of major importance was 
that of " joint and several liability." It was 
urged by some that each of the Allies should look 
exclusively to reparation from that enemy country 
with which 'it had chiefly been in military opposi- 
tion. This would have meant, in effect, that Italy, 
Serbia, Greece, and Kumania would have had to 
secure their reparation exclusively from the Austro- 
Hungarian Empire, which was so dismembered and 
in so critical a financial condition that hope of 
reparation from this source was highly problem- 
atical. These nations under the leadership of Italy 
therefore regarded it as of great importance that 
this principle should be established : that all of the 
assets of the enemy states should he pooled into 
one fund and that all of the Allied and Associated 
states should share in this fund in proportion to 
their approved claims. This latter principle, which 

4 35 



The Making of the Reparation and 

was fully concurred in by the American delegation, 
was ultimately accepted. 1 

The conditions of peace thus took concrete form 
with the reparation principles formulated in gen- 
eral accord with those which the American delega- 
tion had originally proposed. These principles are 
found in the following- articles of the treaty: 

Article 231, recognizing Germany's moral responsibility 
for the war and its consequences. 

Article 232, providing for Germany's obligation to make 
compensation in accordance with the pre-armistice declara- 
tion. 

Article 232 (third paragraph), providing for special com- 
pensation for Belgium for war expenses resulting from the 
violation of her neutrality. 

With the settlement of the principles of repara- 
tion, consideration was given to the scarcely less 
important question of the methods of its perform- 
ance. The problem presented itself in three main 
aspects : 

First, restitution of objects removed but still 
in being; second, reparation in kind of prop- 
erty destroyed; third, financial restitution. 

Restitution is provided for wherever objects have 
been taken away and are capable of identification. 
Where cash has been taken away or seized, restitu- 
tion of an equivalent amount can be required with- 
out the necessity of identifying the exact coin or 
paper currency which has been seized; such identi- 



lReparation payments made by Austria, Hungary, and Bul- 
garia are to go into the general reparation fund. 

36 



Economic Sections of the Treaty 

fication being in the nature of the case practically 
impossible. 

Because of world shortages of the articles neces- 
sary to permit effective reparation, direct repara- 
tion in kind from Germany was thought of para- 
mount importance where money alone would not 
suffice to restore the injured party to Ms pre-war 
position. 

Ships. 

"With, regard to ships, there was general agree- 
ment that practically all of Germany's merchant 
marine should be surrendered as part replacement 
of the losses caused by German submarine activ- 
ities. The question of the allocation of these ships 
among the different Allied and Associated Powers 
proved one of the troublesome problems of the Con- 
ference. It is here briefly described as typical of 
the divergence in national points of view which 
almost every economic problem presented, and the 
solution of which was made possible only by 
mutual concession and appreciation of the position 
of the others. 

The French proposed to allocate to the Allied 
and Associated Powers in proportion to their 
respective war losses, and to place in a pool 
for that purpose, all ships which on August 
1, 1914, flew the German flag. This would 
have resulted in the pooling of all ships con- 
demned by prize court (chiefly British) and 
ships seized in the Western Hemisphere (chief- 
ly by the United States and Brazil). 

37 



The Making of the Reputation and 

The British proposed the pooling of all ships 
which on the da to of the coming into force of the 
treaty were entitled to fly the German flag-. This, 
in British opinion, would have pooled ships seized 
by the United States, Brazil, Cuba, etc., without 
prize-court decisions, and would have left undis- 
turbed the title to ships which had been passed 
through the prize court. 

The American delegates proposed that title to all 
German ships seized during the war should be con- 
firmed in the captor nation, and that only the re- 
maining German ships be placed in the pool. 1 

Mr. Lloyd George strongly urged that ships, 
which were at most only useful additions to the 
economic resources of other nations, constituted 
the very life blood of the British Empire. He pro- 
tested the injustice of a principle that, in one 
case, would permit a nation which had not been an 
active belligerent to increase its tonnage nearly ten- 
fold while only live per cent, of Great Britain's 
tonnage losses would be replaced. 

Mr. Clemenceau urged the claims of France as 
being in a financial situation which rendered it 
exceedingly burdensome for her to pay foreign 
charter hire for her imports. He pointed out that 



lGerman shipping taken over by the United States during 
the war should not be confused with German shipping 
surrendered to the Allies under Armistice Agreements 
for use in the repatriation of troops and for relief pur- 
poses. Certain of these latter ships, including the 
IMPERATOR, were temporarily allocated to the United 
States for operation and subsequently were returned 
by the United States. 

38 



Economic Sections of the Treaty 

during the war France had abandoned ship con- 
struction so as to devote herself exclusively to other 
forms of war activities to which her industries 
were better adapted. 

President Wilson declined to accede to any prop- 
osition that would involve the surrender by the 
United States of ships which had been taken over 
by act of Congress. 

A suggested solution was that the United States 
should retain all vessels seized by her; but this ac- 
tion was not to be extended to other nations of the 
Western Hemisphere. It was not possible, how- 
ever, that the United States, despite its far greater 
contribution to the Avar, should accept a more 
favored position than that accorded to her Pan- 
American associates, who to some extent had 
entered the war under the inspiration of and as an 
expression of sympathy towards the United States. 

The problem was finally solved by agreeing to 
place all the belligerents on an equality. The right 
Avas recognized to retain seized German tonnage 
upon the condition that payment be made for 
reparation account up to the fair value of ships 
retained in excess of those apportioned to replace 
war losses. 

Coal. 

Owing to generally decreased production, and in 
part to the destruction of the war, the world's coal 
situation was so acute that reparation in the form 
of coal deliveries was considered of great impor- 
tance. Though Germany might pay in money or in 
manufactured goods, France feared that without 



q 







The Making of the Reparation and 

assured deliveries of coal, she would find her fur- 
naces idle, her workmen unemployed, and her indus- 
trial reconstruction delayed. This depended in 
great measure on the repair of the Lens coal fields, 
which had been destroyed with such a deliberation 
and thoroughness that five years will hardly suffice 
to restore them. 

The first coal demand upon Germany is thus for 
the delivery to France annually for ten years of 
an amount of coal equal to the difference between 
the current production and the pre-war produc- 
tion of the destroyed French mines. This amount 
is not to exceed 20,000,000 tons per annum for 
the first five years and 8,000,000 tons per annum 
for the succeeding five years. France, on her 
part, undertakes to exercise due diligence in re- 
pairing the mines. Germany herself has been 
given the opportunity to make proposals whereby 
her own engineers will repair the mines as a credit 
on Germany® repa ration account. As the mines 
are gradually restored to normal operations, the de- 
liveries on this account will diminish and may cease 
entirely before the expiration of the contract. 

The second series of coal demands is subordi- 
nate to the first and of a different character. 
France, Belgium, and Italy have always been large- 
ly dependent upon German exports of coal. These 
nations felt a real and quite understandable ap- 
prehension. It was that this dependence might in 
future be utilized by Germany to extort economic 
concessions, whicb in effect would largely nullify 
the reparation and economic terms of the treaty. 

40 



Economic Sections of the Treaty 

Accordingly, as a second category of coal provi- 
sions, France and Belgium are given an option upon 
German coal up to the normal pre-war exports of 
Germany to those countries, and provision is made 
for Italy's necessities. These options can only "be 
exercised in the event that the Separation Com- 
mission considers that their exercise will not un- 
duly disturb the economic life of Germany. That 
is, if Germany has coal for export, she must export 
it to these countries rather than to others. The 
price of the coal to France, Belgium, and Italy is to 
be the same as that charged to German citizens. 

There is much misunderstanding regarding the 
coal clauses. As slated above, the Reparation 
Commission can authorize under the treaty (Part 
VIII, Annex 5, Paragraph 10) the postponement 
or cancellation of deliveries, if it considers that 
the full exercise of the options would interfere un- 
duly with the industrial requirements of Germany. 

There is a great fallacy prevailing as to the pro- 
duction and distribution of raw materials in the 
world. Only in time of war and blockade are the 
location and ownership of coal or other raw ma- 
terials important. At all other times the producer 
desires to sell to those who can use his raw material. 
The principal supply of cotton in the world is in the 
Southern states, yet great mills liave been built for 
the manufacture of cotton goods in Europe. Rubber 
and tin are produced outside the limits of the 
United States, Germany, and France, and yet great 
factories are built in those countries for their use. 

41 



The Making of the Reparation and 

It will bo found that the French who demanded 
and the Germaus who objected to the coal clauses 
were unnecessarily alarmed. When normality in 
production of coal in Germany and Europe re- 
turns;, the producer will find the most available 
market for coal where it had. previously existed. 
This will take place only when that section of 
Europe containing coal gets hack to work. This is 
largely within the hands of the Germans themselves. 

The following statement from a resume of 1 1 err 
Karl P. Yon Siemens, chairman of the Siemens & 
llalske Company of Berlin, on the industrial situa- 
tion in Germany, is illuminating and interesting in 
this matter : 

The chairman, proceeding to discuss the economic life 
of the country, stated that it is too frequently asserted that 
thiB is dependent upon other countries and that the Germans 
will soon come into swing again if they can again obtain 
the necessary raw materials from abroad. In his opinion 
this argument may be correct in regard to one or two in- 
dustries, but it is not the case with many of them, and in 
these instances the decline is just as great as in those which 
need foreign materials. The principal thing lacking is coal, 
not because the Germans have lost too much coal, or have 
to make deliveries to their late enemies, but because an 
insufficient quantity of coal is produced as compared with 
former peace times, and cannot be distributed among 
consumers. 

The coal provisions are therefore of a negative 
rather than positive character, designed to prevent 
Germany from exercising economic pressure upon 
France, Belgium, and Italy by arbitrarily withhold- 
ing the normal movements of her coal to these 

42 



Economic Sections of the Treaty 

nations. The option granted by the treaty upon 
a portion of German chemicals and dyestuffs is 
similar, and transitory in character and purpose, 
lasting for only five years. 

When Europe stops fighting and gets back to 
work there will be no shortage of coal or other 
necessities of life. 

Reconstruction Material. 

To expedite the reconstruction of the devastated 
areas, it was held advisable to require Germany 
to deliver construction material such as wood, 
cement, brick, certain types of machinery, etc. 
This right can be exercised only under very care- 
fully drawn restrictions and through the medium 
of the Reparation Commission. To the commission 
is reserved the right, after examining lists of de- 
sired articles which must be prepared within a 
short period of time, to decide whether the demand 
shall be forwarded to Germany as one which Ger- 
many can meet without undue injury to German 
economic life. In no event shall deliveries extend 
for more than four years. The Reparation Commis- 
sion has further to take into account whether the 
desired materials can be secured elsewhere in the 
world's markets under equally advantageous condi- 
tions as to price and time of delivery. 

Cattle. 

The devastated areas had been completely de- 
nuded of live stock, which had been driven away or 
consumed by the armies of occupation. Estimates 

43 



The Making of the Reparation and 

furnished by the German Government showed that 
the live stock of Germany was little, if any, numeri- 
cally inferior to the pre-war supply. There had 
been, to be sure, a considerable decrease in the 
weight of cattle ami in (he quantity of milk produc- 
tion. This resulted from the shortage in Germany 
of suitable cattle-feed. It was lack of food for 
cattle rather than lack of cattle that was the 
limiting factor in the production of milk and meat 
iu Germany. The food situation of Germany 
would not be appreciably affected by a small re- 
duction in the numbers of live stock. It was thus 
apparent that it would be entirely equitable to re- 
place in Prance, Belgium, or Italy a small percent- 
age of the pre-war live stock of the devastated 
areas, by deliveries in kind from Germany. 

The justice of the foregoing provisions for repa- 
ration in kind was suggested on the ground of the 
economic rnthlessness with which Germany prose- 
cuted the war. The reparation delegates were pre- 
sented with convincing evidence that the German 
armies had systematically destroyed industrial 
property with no military reason, but for the sole 
purpose of rendering the Allied states unable to 
resume their economic life after the war. Wher- 
ever possible, and in preference to destruction, the 
Germans actually carried away, for installation in 
Germany, important units of machinery. The same 
procedure had been followed with regard to live 
stock, which had been either consumed or driven 
back into Germany; and the fine-blooded cattle and 
horses of northern France and Belgium had been 

U 



Economic Sections of the Treaty 

advertised for Bale and for breeding purposes in 
Germany. 

The provisions of the treaty for reparation in 
kind will operate only partially to make good the 
results of this destructive economic warfare prose- 
cuted by Germany. 

How Much Should Germany Pay? 

While the most Immediate and satisfactory form 
of reparation is reparation in kind, obviously only 
a relatively small proportion of "categories of dam- 
age*' could be compensated for in this way. These 
categories of damage, which Germany was to be 
obligated to meet under the terms of the treaty, are 
the basis from which will be figured or assessed the 
amount of Germany's indebtedness, credit being 
given for reparation in kind. 

The greater part of reparation, particularly after 
the first two or three years, would necessarily take 
the form of money payments or bonds. The ques- 
tion of the amounts, periods, and method of pay- 
ment to be required of Germany proved, perhaps, 
the most troublesome single problem of the Peace 
Conference. The committee to deal with this subject 
was among the first to be appointed and the last 
to make its report. 

The first thought, and a perfectly proper one, 
that occurs is, Why was not a fixed sum determined 
and settled in the Treaty of Peace? The American 
contingent contended all the way through for a 
fixed and reasonable sum. Their reasons were that 
it was better for all concerned to have a definite 

45 



The Making of the Reparation and 

amount. It was well for the Allies so that they 
would know exactly what they could depend upon 
to aid in the rehabilitation of their own financial 
and economic life, and it was well for Germany and 
the other debtor nations to know what they had to 
pay, so that they could set about paying it. While 
all might have agreed that a fixed sum should bo 
determined within tin 1 limit of Germany's ability to 
pay, many difficulties appeared. 

No one know how much Germany owed. No one 
yet knows how much Germany owes. No one knew 
how much Germany could pay. No one yet knows 
how much Germany can pay. There was a wide 
divergence among the Allied experts as to what 
Germany could pay. The amounts discussed 
varied from $8,000,000,000 to $120,000,000,000, 
both extremes, singularly, being of English origin. 
One of the difficulties in the situation was that a. 
certain great English financial expert asserted with 
confidence that Germany could pay the latter fig- 
ure. The amount of damages under the treaty 
categories was estimated by various delegates at 
from 82o.000,000,000 to several times that sum. 

Another obstacle in the way of fixing- a def- 
inite sum was the unwillingness of the various 
delegations to present official estimates of the 
amount of their damage. During meeting after meet- 
ing of the first sub-committee of the Commission 
on Reparation, the American delegates urged and 
pleaded for figures of damages. They recognized 
that no precisely accurate figures could then, if 
ever, be given. There were, however, methods of 

46 



Economic Sections of the Treaty 

computation available which could be trusted to 
give approximately accurate results. The American 
delegates themselves had such estimate^ not only 
for the United Sial.es, but for other nations. The 
figures were based on the field examinations 
and studies made; by American experts. But 
while each nation sought access to these American 
estimates as a guide to the damage suffered by. 
other nations, no nation was willing to accept the 
Americas estimate as applicable to itself. 

The British delegation was disposed to support 
the American delegation in its efforts to secure 
definite figures and itself finally filed a provisional 
estimate of British losses. The French remained 
obdurate to the end and refused to make any esti- 
mate of their losses, on the ground that at that 
time such estimates would be only guess-work, and 
that the least conscientious guesser would be the 
greatest gainer. 

Finally, the American delegation, took the posi- 
tion that it could not consent to demanding any 
fixed sum from Germany unless satisfied of damage 
to at least that amount. 

The refusal of most of the Allies to introduce any 
evidence of their own on this point or to accept the 
American est i mates was, therefore, one of the com- 
pelling reasons leading to the postponement of fix- 
ing the amount of the German indemnity to a time 
when Ihe amount of damage could be more scien- 
tifically estimated. The American delegates could 
with difficulty resist giving opportunity for scien- 
tific and careful estimation and checking of each 

47 



The Making of ihc Reparation and 

nation's claims. It was fairly obvious that such 
claims would exceed Germany's ability to pay, yet 
the precise accuracy of each claim was none the 
less of great practical moment. This was the more 
true, since these claims were then expected to con- 
stitute the basis upon which each nation was to 
share in the payments that Germany makes. 

The situation was further complicated by the at- 
titude of the peoples of the nations involved. They 
demanded the uttermost farthing from Germany 
under the categories, on the theory that their 
burdens should not be made heavier to themselves 
and lighter to Germany. Germany in 1S70 had been 
enabled to extract from France $1,000,000,000, an 
amount then not dreamed possible of payment. 
Germany, had in a short, period of time, grasped 
such a large share of the world's trade as to create 
a perhaps exaggerated impression of her commer- 
cial and financial powers and recuperative ability. 
These facts made even the most conservative 
pause in determining the amount within her ability 
to pay. Indeed, there was divergence of opinion 
even among delegations as to the amount that Ger- 
many could pay. 

Many doubted the wisdom of collecting too large 
an amount because of the adverse effect it might 
have upon the creditor nations, and argued along 
the following; line : 



*» 



Obviously only a relatively small portion of Germany's 
debt could be paid out of her then existing resources. The 
limit of her resources was agreed upon to be not more 
than $5,000,000,000, including ships, credits, etc. From 

48 



Economic Sections of the Treaty 

this amount was to be subtracted the payment for the 
armies of occupation and amounts necessary for food and 
raw materials for Germany's rehabilitation. Further pay- 
ments would have to be earned by the performance of serv- 
ices for the rest of the world in the form primarily of 
exports. 

The amount of reparation thus becomes the measure oT 
service which the world is willing that Germany should 
render to it. Large reparations could be paid only undef 
conditions whereby the world affords Germany every en- 
couragement to render to the balance of the world more 
service than the balance of the world renders to Germany. 
It further implies that the Allied and Associated Powers 
will force the German people to surpass their own in 
modesty of living, in industry, and in productive energy. 
Qualities which every Allied Government would desire to 
inculcate into their own people would be adopted by the 
German people, thanks to the external coercion which the 
Allied and Associated Powers would be threatening. 

Germany would become the workshop of the world. Not 
only would the world's market be opened to the goods made 
in Germany, but the economic life of the world would neces- 
sarily adjust itself to the dependence upon German service. 
Once the reparation period were passed, it would be impos- 
sible for the economic fabric of the world at once to be 
readjusted to independence of that service upon which it 
had long become dependent. Trade would continue to move 
in its accustomed channels. Now, however, Germany's ex- 
cess of service to the world would be at a price, with the 
result that the value of service rendered by Germany as 
reparation during the next generation would, in large part, 
be recovered by Germany in succeeding generations, and 
Germany would dominate the economic movement of the 
world. 

In the unanimous report of the reparations sec- 
tion of the Peace Conference, it is stated that large 
reparation payments will require that Germany 

49 



The Making of the Reparation and 

"turn herself into a nation of exporters organized 
for the purpose of paving the reparation claims 
of the Associated Governments, * * * The develop- 
ment by the enemy countries of such a policy as 
just described may lead to the creation, especially 
in Germany, of an organization so highly developed 
and so skillful as to be calculated in the future to 
have considerable and perhaps unfavorable influ- 
ence upon the markets of the world." 1 

While the force of the foregoing observations 
appealed in principle to some, it was natural 
that the various Allied and Associated Towers 
should have different practical reactions. France, 
burdened with debts, with great industrial areas 
blasted, with man power shattered, was concerned 
primarily with securing relief during the next gen- 
eration. In the face of immediate financial and 
economic problems of extreme gravity, the specter 
of German economic supremacy thirty years hence 
did not appear alarming, particularly as France 
herself had never been a dominant factor in in- 
ternational trade. 

This attitude of France was largely shared by 
Italy and Serbia. Belgium, however, was appar- 
ently more apprehensive of the danger of forcing 

lit was also brought forward that a crushing policy would 
precipitate an exodus of Germans and a consequent 
Germanizing of Poland, Russia and the Balkans. This 
would result in a greater future danger for the Allies 
than even the menace just passed. A hopelessly 
burdened Germany, with the attendant social reflexes, 
was not a pleasant picture for her neighbors and the 
world in general to contemplate. 

50 



Economic Sections of the Treaty 

Germany to organize into a. great industrial ma- 
chine. Great Britain should logically have been 
even more apprehensive, as being less dependent 
upon relief from Germany and as desirous herself 
to play the principal role . of manufacturer 
and broker for the world. The English were, how- 
ever, reluctant frankly to adopt a policy of moderate 
reparation, which, however much in the real interest 
of Great Britain, would have involved a direct 
repudiation of election pledges. 

The United States, while directly involved to a 
relatively small amount, was interested from the 
standpoint of stabilizing world conditions. If it is 
to be a recipient of German reparation payments, 
it will be only to a comparatively small extent. 
But unquestionably the industrial and financial de- 
velopment of the whole world for a long time to 
come will be largely influenced by the reparation 
settlement. 

The Americans continually brought forward the 
necessity of fixing a definite sum. 1 They urged the 
necessity of doing so because of the needs of the 
Allies themselves. They urged that money given 
now and expended would be of greater value than a 
larger sum received later. They urged the crying 
need of all the Allied peoples for rehabilitation 
and readjustment, and the necessity for this pur- 
pose of a new basis of credit. "What they had in 



Hn an endeavor to compromise the different views, an tin- 
successful effort was made to fix more definite terms 
by arranging for a minimum and maximum sum. 

5 51 



The Making of the Re pa rat ion and 

mind was the preservation of the economic struc- 
ture and the saving of Europe from bankruptcy. 

The President and his financial advisers passed 
days and weeks vainly endeavoring to convince 
their colleagues in the Allied and Associated Gov- 
ernments that it was impossible for Germany to 
pay anything like the sums required under the 
categories. They further submitted that even if 
this were possible, the Allied Governments could 
not afford, and would in time recognize that it was 
not to their advantage, to exact payments that 
could be made only at the expense of their own 
trade. Therefore, in the American view it was to 
the interest of the Allied and Associated Govern- 
ments to fix a reasonable, definite amount that 
Germany could pay and that they could afford to 
have her pay. 

It is pertinent to point out that at the time in 
question it was intimated in one quarter that if 
insistence were made on fixing a definite amount 
before the Allies had a chance to present their 
claims and to study and know more fully the ability 
of Germany to pay — a sum which might prove later 
on to be less than Germany could pay — the Allies 
might be in a position where they could put forth, 
the following claim : 

If you ask us to lessen our claims upon Germany for in- 
demnity, which she admits she owes, what will you do for 
the loan made to us for the prosecution of a war which was 
as much your war as our war, the amount of which clearly 
exceeds our ability to pay unless we are allowed to get 
the last possible dollar out of Germany? 

52 



Economic Sections of the Treaty 

Of course, it was generally recognized that the 
indebtedness of the Allies to the United States had 
no relation to Germany's reparation obligations to 
the Allies. As a matter of fact, the economic and 
financial recovery of the Allies, and hence their 
ability to pay America, would be increased rather 
than diminished by reducing and fixing Germany's 
debt at an amount which could be paid and which 
could be capitalized as a means of obtaining funds 
therefrom for immediate reconstruction purposes. 

It is interesting to observe that one of the fore- 
most critics of the treaty and of the President's 
position upon it, and the one, perhaps, who advo- 
cates the smallest fixed sum for Germany to pay 
which has been seriously urged, couples his argu- 
ment with a provision that the United States shall 
cancel the entire indebtedness due her from the 
Allies. Not only so, but he suggested that the 
United States shall also be guarantor of a new 
series of bonds to be issued for the rehabilitation 
of Europe. 

To expect that these problems could receive any 
wise final solution at the Peace Conference itself 
discloses a visionary confidence that ignores the 
complexity of the questions and the difficulty of the 
conditions under which the peace negotiators had to 
labor. 

The world demanded and was entitled to ex- 
pect a prompt formulation of conditions of peace. 
Final solution of the reparation clauses necessarily 
had to be deferred. The difficulties were accentu- 
ated by the need of securing acceptance of the 

53 



The Making of the Reparation and 

reparation solution by the affected nations that 
were to be signatories to the treaty. All of 
these nations were interested in reparations from 
varying points of view. 

Furthermore, reparations had become a leading 
popular and political issue among the European 
allies. The white heat of war had not yet had time 
to cool. Reparation was popularly regarded as a 
measure of moral retribution rather than as an in- 
dex of future trade, movements. This popular feel- 
ing could not but influence the peace delegates. 

One must be either ignorant, vicious, or an im- 
practical idealist to contend that in the forego- 
ing circumstances it was humanly possible to have 
found at the Peace Conference a sound, definitive 
solution of the German reparation problem which 
would have met with ratification. 1 No one man or 
group of men is responsible for the conditions 
which created this situation; they inhered in the 
character of the war itself and in the war's after- 
math. 

The American delegates realized at last the in- 
surmountable obstacles to fixing at that time a rea- 
sonable amount of reparation. Thus they came to 
the conclusion that they should not assume the re- 
sponsibility of objecting to an effort by the Allies 



lEver since the pinning of the treaty the Allies have heen 
seeking a specific solution, yet without definite success. 
This will come only after time has helped to cool pas- 
sions, when calm judgment prevails, and when Ger- 
many fully realizes that she must meet her obliga- 
tions. 

54 



Economic Sections of the Treaty 

to collect from Germany what she owed them, pro- 
vided they would agree to certain safeguards 
against the dangers of such a course. 

The United States, relatively speaking, had no 
great direct interest in what Germany was to pay, 
but she had a sincere desire for all nations con- 
cerned that the world should not be thrown into 
disorder and its commerce deranged by an attempt 
to create and collect a debt which could not be paid. 

Because of misrepresentations and misconcep- 
tions as to the amount that Germany could pay and 
as to the amounts which she owed, it was impossible 
to agree upon an amount to be exacted from her. 
What she could pay was in any event less than t]\e 
amount that she should pay. The American dele- 
gates, therefore, consented reluctantly to the pres- 
ent arrangement. That arrangement is by no 
means, however, what it is represented to be by the 
critics, for it offers decided safeguards that they 
fail to mention. 

The Peace Conference accordingly adopted a pro- 
visional solution of the question of the amounts to 
be paid by Germany in succeeding years. The ex- 
perts of the Allied and Associated Powers were in 
substantial agreement that the quick, realizable 
surplus assets of Germany amounted to about 
15,000,000,000. This figure was accordingly adopted 
to measure the values which Germany must sur- 
render by May 1, 1921. 

The value of reparation in kind — namely, ships, 
coal, reconstruction material, etc., — made prior to 
this date, is accounted as a credit toward the sum. 

55 



The Making of the Reparation and 

The sum is likewise inclusive of amounts to be paid 
by Germany toward the expenses of the armies of 
occupation. Further flexibility is given to this par- 
ticular reparation clause. It is in the power of the 
Reparation Commission to permit Germany to de- 
duct from the $5,000,000,000 the necessary funds 
to pay for such food and raw materials as the Re- 
paration Commission deems necessary to be im- 
ported into Germany. 

The question of further payments by Ger- 
many is left unsettled, but with a direction 
that it be determined by May 1, 1921. The power 
to fix this amount is vested in the Reparation Com- 
mission. To this commission the Peace Conference 
sought to give those attributes that the Peace Con- 
ference itself had lacked but which were recog- 
nized as essential to an intelligent solution of the 
reparation problem. 

The Reparation Commission. 

The character and powers of the Reparation 
Commission may be outlined as follows : 

(1) The Reparation Commission is compact in character. 
Provision is made for five delegates to be named respectively 
by Great Britain, France, Italy, the United States, and Bel- 
gium, the latter, when shipping matters are under discus- 
sion, being replaced by Japan, and when Austrian, Hungar- 
ian, and Bulgarian questions are being considered, replaced 
by the Kingdom of the Serbs, Croats, and Slovenes. The 
commission is thus from the standpoint of membership a 
practicable and workable body. 

(2) The Reparation Commission is invested with broad 
power. It is appointed as agent of all the Allied and Asso- 



K 



6 



Economic Sections of the Treaty 

ciated Powers for the purpose of collecting reparations, and 
is given general control and handling of the entire repara- 
tion problem. In particular it has the power to fix the 
amount of reparation for which Germany is liable. Possibly 
the most unusual power which the commission possesses is 
that of interpreting conclusively the reparation provisions 
of the treaty. The commission may thus override tech- 
nical difficulties and inconsistencies of expression. Indeed, 
it is invited to treat the reparation clauses of the treaty in 
a practical business-like way with disregard, if need be, of 
legal and diplomatic technicalities. 

(3) The Reparation Commission is afforded time to study 
maturely the problems upon which it must pass, although, 
on the other hand, it must act with reasonable diligence. By 
May 1, 1921, when Germany's first installment has been 
paid, the Reparation Commission must have determined 
the amounts, dates, and methods of future payments. Even 
this solution may, however, be subsequently adjusted if 
events should prove it to be unworkable. 

Decisions of the Eeparation Commission are not 
"revisions'' of the treaty. Any such revision would 
require resubmission of the treaty and its approval 
by new parliamentary ratifications. The decisions 
of the Reparation Commission are executory with- 
out action by any government, except in the case of 
reducing or canceling the amount of the debt or of 
certain postponements. 

The general power and discretion vested in the 
Reparation Commission cannot, however, be exer- 
cised arbitrarily. Certain fundamental principles 
are established for the guidance of the Reparation 
Commission. 

The first, and perhaps the most important, of 
these principles, is that reparation is to be collected 

57 



The Making of the Reparation and 

with due regard to the economic life of Germany. 
One of the weightiest matters that confronted the 
Peace Conference was whether the Allied right to 
reparations should be used to destroy Germany 
economically. 

Obviously such destruction would of itself limit 
the amount of reparation obtainable. One can- 
not eat his rake and have it too. But there 
were many who preferred to see Germany crip- 
pled economically even at the expense of fu- 
ture reparations. This view did not prevail, 
and one of the reiterated instructions to the 
Reparation Commission is that it shall have 
due regard for the economic life of Germany. The 
coal options are to be enforced only with regard to 
the industrial needs of Germany (Par. 10, Annex 
V). Reconstruction material is to be demanded 
only in relation to the industrial life of Germany 
( Tar. 4, Annex IV). In their interpretive note to 
Germany of June 1G, 1910, the Allied and Asso- 
ciated rowers made the following declaration: 

The resumption of German industry involves access by the 
German people to food supplies, and by the German manu- 
facturers to the necessary raw materials and provision for 
their transport to Germany from over-seas. The resumption 
of German industry is an interest of the Allied and Asso- 
ciated Powers, as well as an interest of Germany. They are 
fully alive to this fact and therefore declare that they wiM 
not Avithhold from Germany commercial facilities without 
which this resumption cannot take place, but that, subject 
to conditions and within limits, which cannot be laid down 
in advance, and subject also to the necessity for having 
due regard for the special economic situation created for 

58 



Economic Sections of the Treaty 

Allied and Associated countries by German aggression and 
the war, they are prepared to afford to Germany facilities 
in these directions for the common good. 

The foregoing declaration contemplated in par- 
ticular the temporary retention by Germany of cer- 
tain ships to carry essential imports until new Ger- 
man construction could meet this need. 

Before passing on any question involving Ger- 
many's capacity of payment, the Reparation Com- 
mission is required to give Germany adequate op- 
portunity to be heard (Par. 9, Annex II). The 
only defaults by Germany which subject her to 
penalty and retaliatory action are wilful defaults 
(Par. 18, Annex II, and Article 430). 

A second great guiding principle established as 
an instruction to the Reparation Commission is that 
the performance of reparation by Germany should 
be limited to the period -of one generation — i. e., 
thirty years from May 1, 1921. 

It may be true that the financial burdens 
of the war cannot be liquidated in one gen- 
eration. Nevertheless, these financial burdens 
differ radically from reparation obligations that 
might involve a certain subjection to foreign 
control. It did not seem either equitable or wise to 
extend the latter type of obligation beyond the 
period of the generation which could be charged 
with a share in the moral responsibility of the war. 

From a practical standpoint, the present capital 
values of a sum payable without interest after 
thirty years is very small. To have required in- 
terest payments on sums due after thirty years 

59 



The Making of the Reparation and 

would have meant the practical impossibility of 
ever discharging the principal of the debt. 

The essential spirit underlying the reparation 
settlements is thus aptly described in the following 
sentences from the Allied and Associated note to 
Germany above referred to : 

The vast extent and manifold character of the damage 
caused to the Allied and Associated Powers in consequence 
of the war has created a reparation problem of extraordi- 
nary magnitude and complexity, only to be solved by a 
continuing body, limited in personnel and invested with 
broad powers to deal with the problem in relation to the 
general economic situation. The Allied and Associated 
Powers, recognizing this situation, themselves delegate 
power and authority to a Reparation Commission. This 
Reparation Commission is, however, instructed by the treaty 
itself so to exercise and interpret its powers as to insure, 
in the interest of all, an early and complete discharge by 
Germany of her reparation obligations. It is also instructed 
to take into account the true maintenance of the social, 
economic, and financial structure of a Germany earnestly 
striving to exercise her full power to repair the loss and 
damage she has caused. 

A careful analysis can but sustain the above quo- 
tation. It is frequently asserted that the repara- 
tion clauses are "impossible" of performance. Such, 
statement is fallacious, because it is provided that 
any demonstrated incapacity of execution in itself 
excuses lack of performance. As noted, no penalty 
is stipulated except for the execution of those obli- 
gations u-hich Germany can, but toil fully refuses, 
to perform. 

There is not an important reparation demand 
made upon Germany which cannot be adjusted 

CO 



Economic Sections of the Treaty 

under the treaty to meet Germany's needs and 
capacity. It is true that this creates a regime 
of some uncertainty, entailing economic disad- 
vantages. The machinery, however, is established 
whereby this uncertainty can and should be rapidly 
dissipated under conditions far more conducive to 
a wise settlement than those which prevailed dur- 
ing the first four months of 1919. 

Unfriendly critics charge that the Reparation 
Commission will be an instrument of oppression. 
That is the extreme German view. 1 The American 
delegates who took part in the drafting of the 
reparation clauses believe that the representatives 
of the other nations who participated in preparing 
the reparation settlement meant to be just. The 
Americans are convinced that in the execution of 
the reparation clauses justice and wisdom will pre- 
vail. Interests both selfish and humane will de- 
mand this outcome. 

German Bonds. 

While the ultimate amount to be paid by Ger- 
many was thus left to the judgment of the Repara- 
tion Commission, the Allies desired to have in their 
hands certain evidences of indebtedness issued by 



Ht is claimed that Germany and future generations of Ger- 
mans will have to bear a great burden. This is true, 
and it is justly true. While Germany should not be put 
to impossible tasks, her burden certainly should be no 
less, but logically and in justice should be greater 
than that of the nations and peoples whom she has 
wronged. 

61 






The Making of tlic Reparation and 

Germany. Such evidence might be available for 
realization for some immediate credit, and would 
correspond roughly with the provisional estimates 
as to Germany's capacity to pay. The bonds rep- 
resenting this evidence could not be put into cir- 
culation until the Reparation Commission unani- 
mously so determined. It was accordingly provid- 
ed that Germany upon the coming into force of the 
treaty should issue to the Reparation Commission 
certain bonds. These bonds are of four issues. 

The first is an issue of 20,000,000,000 gold marks 
payable May 1, 1921, without interest. These 
bonds correspond to and will be discharged in part 
by the $5,000,000,000 (20,000,000,000 gold marks), 
which as above described was fixed as the amount 
that it was estimated Germany should be able to 
raise in the immediate future principally out of 
accumulated assets. Of this $5,000,000,000, part 
might be used to pay for the expenses of the 
armies of occupation, and part for essential food 
and raw material imports. But it is stip- 
ulated that if the initial payment does not suf- 
fice to discharge the full 20,000,000,000 marks of 
bonds due May 1, 1921, the balance shall be car- 
ried forward and converted into bonds of a later 
(the third) series due in 1951. 

The second issue of bonds is to cover the war 
costs of Belgium. The amount of these bonds has 
not been definitely fixed, but it will be about 1,000,- 
000,000 gold marks to fall due on May 1, 192C. 

The third series of bonds is to the amount of 
40,000,000,000 gold marks ($10,000,000,000) bear- 

62 



Economic Sections of the Treaty 

ing interest at 2y 2 per cent, from 1921 to 192G and 
5 per cent, thereafter with 1 per cent, for amortiza- 
tion. This, it was estimated, would retire the 
bonds in about 1951 or in the thirty-year period 
fixed as the period for Germany's reparation 
obligations. 

There is a contingent agreement to issue a fourth 
series of bonds for another installment of 40,000,- 
000,000 gold marks. These bonds, however, can- 
not be issued until the Reparation Commission is 
satisfied that Germany can meet the interest and 
sinking fund obligations on this and on the second 
and third series of bonds. 

Further issues by way of acknowledgment and 
security may be made as the commission subse- 
quently determines from time to time. 

Additional safeguards are thrown around these 
bond issues by the provision that it requires the 
unanimous consent of the Reparation Commission 
to determine the amount and conditions of bonds 
or other obligations to be issued by the German 
Government. The same consent is required to fix 
the time and manner for selling, negotiating, and 
distributing such bonds. 

It is sometimes asserted that by these bond pro- 
visions the treaty has already fixed an amount to 
be paid by Germany that is beyond her capacity, 
and that thus the treaty is "impossible of fulfill- 
ment" and must be "revised." This contention 
ignores many essential facts. The aggregate of 
bonds to be delivered without further affirmative 
action of the Reparation Commission is about 

G3 



The Making of the Reparation and 

$16,000,000,000. Of this sum, $5,000,000,000, or 
as much of this sum as possible, is to be discharged 
by the initial payment and by various credits pro- 
vided for by the treaty. This would leave $11,000,- 
000,000 of bonded indebtedness plus whatever part 
of the §5,000,000,000 is not discharged as stated 
above. 

These bonds are delivered to the Reparation 
Commission merelv as "security and acknowledge 
ment" for the payment of the amount which will 
ultimately be fixed. Without unanimous action 
of the Reparation Commission, they cannot be ne- 
gotiated or distributed. They in no sense involve 
a final pre-judgment of the amount Germany will 
in the end be called upon to pay. Even if they did, 
the amount is subject to cancellation or diminu- 
tion. 1 Irrespective of those bond provisions, the 
amount of Germany's liability remains open for 
fixation in accordance with the cooler judgment of 
the Governments represented in the Reparation 
Commission. 

The German Attitude Toward Reparation. 

The reparation clauses were in substantially 
the form that has been described when the 
treaty was handed to the German peace dele- 
gation, which was given the opportunity to 
present its observations thereon. The German 
comments, which were very lengthy, were de- 



lThis requires the unanimous consent of the Governments 
represented on the Reparation Commission. 

64 



Economic Sections of the Treaty 

voted in large part to criticism of the supposed 
excessive and inquisitorial powers of the Repara- 
tion Commission. The reply did, however, contain 
an express recognition of Germany's willingness to 
assume all damage and war costs that had fallen 
upon Belgium as a result of the violation of Bel- 
gium's neutrality. It also contained Germany's 
recognition of obligation to make good the devasta- 
tion caused in France. The Germans further made 
a definite proposal for fixing the amount of their 
liability. The sum proposed by Germany was 100,- 
000,000,000 gold marks payable without interest. 
Of this sum 20,000,000,000 marks was to be paid by 
May 1, 1026. Hut against this sum Germany de- 
manded as credits not merely the items which were 
provided as credits in the conditions of peace, but 
also the value of war material delivered under the 
armistice terms, the value of public property in 
ceded territory, and a proportionate part of the 
German public debt (including war debt), which 
could be attributed to ceded territory. 

The remaining 80,000,000,000 marks would be 
paid thereafter in annuities, not exceeding 1,000,- 
000,000 gold marks per annum for the first ten 
years. At the end of ten years the amount of annu- 
ities was to be arrived at by a mutual agreement. 
This German offer as a whole was further condi- 
tioned on Germany receiving certain concessions in 
respect of other economic terms of the treaty. 

The American delegates recognized that the Ger- 
man offer as made could scarcely be regarded as 
satisfactory, particularly on account of the numer- 

65 



The Making of the Reparation and 

OUS credits and conditions that Germany de- 
manded. It was likewise unsatisfactory because 
of the low amount of the annuities suggested, 
which would have deferred final payment for 
many years, and thus greatly reduce t ho present 
capital value of the sum offered. The Americans 
did feel, however, that the German offer was 
sufficiently substantial to afford hope that some 
satisfactory: definite sum might bo arrived at. Ac- 
cordingly, the American delegation, with the au- 
thorization of the President, again renewed its 
efforts to induce the Allies to fix by the treaty the 
final amount which Germany would be required to 
pay, and it again presented the arguments show- 
ing the advisability ami wisdom of such action. 1 

With reference io the German counter-proposal 
concerning reparation, the following verbatim 
memorandum shows the line of reasoning of the 
American delegation at that time and the argu- 
ments presented to the conferees: 

June 3, 1919. 

(1) The Gorman counter-proposal offering, subject to 
various credits payments to aggregate 100 milliards of 



iThe Americans, with the approval of the President, made 
an effort to arrange a meeting with the German eco- 
nomic advisors for the purpose of discussing repara- 
tlonal and economic matters. In this effort they were 
supported generally by tbe economic and business ad' 
visers of the various governments. The military ad- 
visors almost without exception were opposed to this 
meeting. But it was impossible to obtain the unani- 
mous support of the leaders of state. 

66 



Economic Sections of the Treaty 

marks sold, raises the question of whether a determined 
effort should not again be made to fix Germany's reparation 
liability in terms of definite figures. 

(2) The American reparation delegates have always 
been unanimous in the belief that the treaty should fix a 
definite sum for Germany to pay. The considerations ad- 
vanced by the German reply in favor of a fixed sum are not 
new in themselves, but are reinforced by a comprehension, 
daily becoming clearer, of the critical financial situation 
of Europe. 

(3) There have been but two principal arguments against 
the fixation of a definite sum — namely: 

(a) It is impossible to tell today just how much Germany 
might be able to pay within the next generation. A mis- 
calculation might release Germany, at heavy cost to the 
Allies, from a just liability which, it would subsequently 
develop, Germany was fully capable of discharging. Ger- 
many's liability should, therefore, be expressed elastically, 
so as to insure the utilization of Germany's full future 
capacity of payment to make good the almost unlimited 
damage caused by her. 

(b) The political situation among the Allies is so un- 
settled, and the popular expectation of relief by payments 
from Germany runs so high, that it might have serious 
political consequences to name definitely Germany's lia- 
bility. Even the highest figure which has been considered 
would disappoint popular expectations. 

(4) With respect to the latter argument, it may be ob- 
served that the financial and economic situation of Europe 
is so serious that no government would adopt, merely as a 
matter of domestic politics, a policy which is not defensible 
on its merits. The only political consequences to be taken 
into account are those relating to the stability of govern- 
ment in general. It is conceivable that a severe popular 

6 67 



The Making of the Reparation and 

disillusionment at this time might lead to social unrest, 
which would have really serious national and international 
consequences. It seems far more probable that to continue 
to perpetuate uncertainty as to the amount of Germany's 
payments will merely postpone an awakening- until a time 
when the situation may be even more critical. In the inter- 
vening period the people will not have exerted their fullest 
efforts to aid themselves, as would have been the case had 
they earlier realized their real situation. 

(5) With regard to the argument that there is danger 
today of underestimating Germany's capacity to pay. it 
may be said that this risk is perfectly real and fully recog- 
nized. It is. however, a risk which must be balanced against 
the risk of attempting to secure from Germany more than 
she can pay, or adopting a procedure which destroys Ger* 
many's incentive to pay. Of the two risks the latter is 
infinitely the more serious. To seek too much jeopardizes 
the whole; to obtain too little involves only the loss of the 
difference between what is, and what might have been. paid. 

(6) It is further to be observed that what the world 
requires, and requires immediately, is a new basis of credit. 
A dollar today is probably worth two dollars five years from 
now. A definite obligation assumed by Germany, under 
conditions which warrant us in believing that Germany 
herself has the will and believes she has capacity to dis- 
charge such obligation, will servo as an immediate basis of 
credit. A far larger amount assumed under equally satis- 
factory conditions eighteen months from now would not 
begin to have the same practical value. Also a la 
amount imposed today at the point of the bayonet and in 
the face of declarations by Germany (which will be ac- 
cepted by conservative persons throughout the world) that 
the sum is far in excess of her capacity, would prove of 
little or no value as a basis of credit. 

(7) The present reparation plan is, in our opinion, open 
to the serious objection that it may, in practice, operate to 

6S 



Economic Sections of the Treaty 

destroy economic incentive on the part of the present genera- 
tion in Germany. Germany is set a task without end, and 
the more she labors the more will be taken from her. 
Furthermore, little is obtainable under the plan in the im- 
mediate future, aside from deliveries of bonds, which will 
not command the confidence of investors because, among 
other things, they may be followed by an indefinite amount 
of similar bonds. And it will be in the interests of Germany 
herself to destroy popular confidence in the initial install- 
ments of bonds taken from her, as once these bonds acquire 
any marketable value, still further issues will be taken 
from Germany. 

(8) Europe's need is immediate. Any substantial delay 
in securing from Germany an obligation having a substan- 
tial present value may involve consequences which will 
approach a disaster. The risks involved in delay far out- 
weigh the difference between such definite sum as might be 
fixed today and the most optimistic estimates which have 
been made as to Germany's capacity. 

(9) We therefore strongly recommend that the oppor- 
tunity offered by Germany's counter-proposal be taken ad- 
vantage of to fix a definite obligation which Germany will 
assume in a manner at least semi-voluntary. The German 
people can then be left free from the continuing interference 
and control of the Reparation Commission to work out their 
own problem in their own way. Under such conditions there 
is every reason to believe that the German people will again 
become a stabilizing, productive, and constructive factor in 
the world's economy. 

(10) To secure acceptance by Germany of a high figure, it 
may be necessary to leave Germany a certain amount of 
working capital and sufficient shipping to meet her domestic 
requirements. This, in principle, we are prepared to 
recommend. 

69 



The Maling of the Reparation and- 

At one time it appeared as if the American efforts 
would come to a successful termination. 1 But al- 
though some changes were made 1 in other sections of 
the treaty as a result of the German reply, a sud- 
den fear seized some of the Allies that too great 
changes might be brought about. The Americans 
were, therefore, unable to make the reparations 
more definite. Every other delegation solidly and 
stolidly refused io move. If at that time there was 
one apparently unanimous opinion among the dele- 
gates of the Allied and Associated Powers, it was 
that the reparation clauses should stand as made. 
Thev felt that they had already made a tremendous 
concession in limiting their claims to reparation 
in such a way as to exclude war eosts. To rix a 
sum before examination of the facts was to them 
like giving Germany a quit-claim in the dark. 

Where questions of principle were involved, and 
particularly the conditions of the pre-armistice 
agreements, the American delegation, under the 
leadership of President "Wilson, could and did take 



iThe American delegation was particularly encouraged as 
the result of a conference of the members of the British 
cabinet called by the Prime Minister to consider the 
German reply. It is understood that some of the 
cabinet members were inclined to make changes in 
various parts of the Treaty along the line of the Amer- 
ican contention. Some changes were made, but the 
support expected by the Americans for the fixing of a 
definite sum was not forthcoming. Obviously, certain 
present-day critics have either not been in possession of 
these facts or, possessing them, have misinterpreted 
them. 

70 



Economic Sections of the Treaty 

a definite position. It refused to make compromises 
which would have involved a departure from a fair 
construction of the pre-armistice terms. Once, 
however, these questions of principle had been set- 
tled, and the basis for determining Germany's 
debt had been fairly arrived at, the question of 
letting Germany off with less than she owed was a 
matter of expediency and not of principle. In this 
question the final word necessarily had to rest with 
the creditor nations, of which the United States 
was not one of outstanding importance, so far as 
financial claims were concerned. 

The most that the American delegation could do 
Avas to urge upon its associates, in their own and in 
the whole world's interest, the necessity and prac- 
tical wisdom of fixing Germany's liability. When, 
however, they were not persuaded, the American 
delegation felt that it had done all that it properly 
could do in the circumstances. To have adopted 
any other course and to have insisted as a matter of 
right that creditors of Germany should waive in 
part their admittedly just claims against Germany 
might have encouraged the effort to re-open the 
Avhole question of Interallied indebtedness and re- 
financing. 

I refer here to the proposition brought forward 
to the effect that bonds for part of the repara- 
tions to the value of £1,800,000,000 ($9,000,000,- 
000) as from January 1, 1925 (the date from which 
they bear interest), should be issued by enemy 
states or by certain states acquiring enemy ter- 
ritory. The proposition further provided that 

71 



The Making of the Reparation and 

these bonds should be guaranteed by the prin- 
cipal Allied and Associated Governments, by the 
three Scandinavian Governments, and by the Gov- 
emments o( Holland and Switzerland. 

It was proposed under this scheme that the Tint- 
ed States should guarantee 20 per cent. o( the issue. 
In the event of any of the guarantor Governments 
failing to meet their guarantees, the remaining 
guarantor Governments might be obligated to 
double their original proportionate share. That 
might have made it necessary for the United States 
to guarantee 40 per rent., or about $3,450,000,000. 
No serious consideration was ever given to this plan. 
Bnt it is evidence of an attitude on the part of 
others which would have been strengthened if 
through our insistence a fixed definite sum had 
been made before the Allies had had an opportunity 
;o examine all of the matters ami had come to the 
conclusion of the necessity in their own interest 
of fixing this definite sum. 'While these arguments 
may not have been tenable, it can easily be per- 
ceived that they might have been embarrassing. 

The conditions of peace, in so far as they 
related to reparations, were not modified as a 
result of the German observations. The Allied 
reply contented itself with explaining a number of 
points with reference to the powers o( the Repara- 
tion Commission, which had been misunderstood by 
the Germans. Ft was thought by the American 
delegation that the elastic provisions in the repara- 
tion clauses afforded instrumentality whereby, 
when the world came to a liberal view of its situa- 

72 



Economic Sections of the Treaty 

lion, :i definite, reasonable sum could be arrived 
at which would be to the advantage of the creditor 
ii;i( ions. 

This view is being justified by the various 
conferences that have been and are now (July, 
1920), taking place, at which discussions have 
been ami are revolving around the fixing of a def- 
inite sum. Belief in the elasticity of the coal 
clauses lias been justified by the action taken modi' 
fying the deliveries of coal to meet the situation. 

Doubtless, any one of the Allied and Associated 
nations might itself have negotiated a separate 
treaty with Germany, which <o the nation concerned 
would be more satisfactory than the treaty actually 
signed. It should be borne in mind, however, that 
the immediate and grave danger that faced the 
world after the conclusion of the armistice with 
Germany and that faced all those at the Peace 
Conference was that the tweul v-seven nations com- 
prising the Allied and Associated Towers could not 
agree among themselves. 

The present relation be! ween Italy and the King- 
dom of the Serbs, Croats, and Slovenes with regard 
to Flume illustrates how readily the Allied and 
Associated Towers might have become broken 
among themselves. If, estranged from one an- 
other, they had left the Peace Conference with- 
out an agreed basis for their future relations, 
an appalling situation would have resulted, and 
a period of world-wide chaos would have been in- 
augurated. 

An important date in the history of the world is 

73 



The Making of the Be pa rat ion and 

May 7, 1910, when the Allied and Associated Powers 
finally agreed among themselves on the conditions 

of the future peace. This agreement was reached 
j and a solution found only through a spirit of mu- 
tual concession. History will judge whether the 
leaders who made the necessary concessions were 
wise and had a just appreciation of international 
values. For each nation to have insisted upon a 
treaty which embodied exclusively its own ideals 
and promoted exclusively its own national inter- 
ests would have involved separate and conflicting 
treaties of peace. This would have divided the 
world into many hostile camps and precluded any 
harmonious co-operation in the scheme of repara- 
tion and in the rehabilitation of the world. 



This volume goes to press as the Allies have con- 
cluded a conference with the Germans at Spa, The 

deliberations there showed the impossibility of 
having arrived at a perfect solution of reparations 
in the Taris conference. It is becoming increasingly 
plain that the reparation clauses were framed to 
make possible a successful future solution of the 
problems involved. 

As the needs of the Allies are better understood, 
as Germany's ability to pay is more definitely dis- 
closed, as her willingness to meet her obligations 
is increasingly manifested, and, above all, as the 
anger and hatred engendered by the war cool, a 
wiser solution becomes possible. The final outcome 

74 



Economic Sections of the Treaty 

must carry with it the sanction of a public opinion 
awakened to the needs of the world. The machinery 
of the Reparation Commission awaits this aroused 
opinion. 



DRAWING THE ECONOMIC CLAUSES 



II. 

Drawing the Economic Clauses. 

The outbreak of the war disrupted all business 
and all social relations between nationals 1 of the 
belligerent states. One of the problems with which 
the Peace Conference had to deal was the re-estab- 
lishment of these relations on a satisfactory basis. 

The framers of the economic clauses were faced 
with the same conditions and enshrouded in the 
same atmosphere that I have endeavored to depict in 
the opening pages of this book. Each nation, with 
its destroyed or crippled business, felt that it was 
entitled to special treatment in order that it should 
be placed in a position to carry its burdens and take 
its former place in the world's trade. Practically 
the whole industrial life of the Allies had been con- 
verted from a peace to a war footing. To convert it 
back from war to peace and to reestablish financial 
arrangements and trade routes would require time. 

In addition, the Allies saw in front of them a Ger- 
many with machinery and factories intact and 
ready immediately to get into competition for the 
world's market. The unfair trade practices of Ger- 
many had sunk deeply into the minds and hearts of 
the Allies, who were determined that, at least for 
a transition period, until they were able to get 
on their fret, these 1 practices should not be renewed. 



1A general term meaning citizens or subjects. 

79 



The Making of the Reparation and 

The Allied delegations particularly and forcibly 
alleged that the German differential or discrimina- 
tory tariff had been used as a definite weapon of 
commercial aggression and that in discussions in 
Germany respecting the tariff it was often referred 
to as a means of imposing Germany's will upon 
other nations. Furthermore, they asserted that Ger- 
many had so quickly mastered such a huge share of 
the world's trade that there was a great danger to 
the Allies that if Germany were left free to use her 
previous methods, they would soon be economically 
crushed unless at least a temporary relief was given 
from the use of such methods. 

It was with much difficulty that the Allies were 
convinced against their desire and what they be- 
lieved to be the necessity of placing permanent and 
very severe restrictions upon Germans and German 
trade. In the end, however, the restrictions or pro- 
hibitions that were imposed are only temporary and 
transitory, are no real hardship upon Germany, and 
are justifiable in all the circumstances. 

In passing it may be said that it was always the 
Americans who had to take the lead in arguing 
against extreme measures. As can be imagined, this 
was by no means an agreeable posit ion. Any appar- 
ent restrictions are in no sense a measure of the 
original demands. Repeatedly it had to be brought 
to the attention of all concerned that a crippling of 
the industries of Germany would prevent the pay- 
ment of any large sum of reparation and was con- 
trary to the spirit of the terms set for peace. But 
at all times one was forcibly struck with the spirit 

SO 



Economic Sections of the Treaty 

of fairness and conciliation of the various delega- 
tions. There was a general desire to give up as far 
as possible for the common good what appeared to 
each delegation to be just and necessary demands. 
Many subjects in dispute were left to the decision 
of the American representatives. 

At an early stage of the conference the Eco- 
nomic Drafting Committee, composed of one rep- 
resentative of each of the five great Powers, was 
appointed for the purpose of recommending to the 
conference economic measures for incorporation 
into the treaty. 

This task, while perhaps loss conspicuous than 
that entrusted to the Reparation Commission, was 
probably of equal importance. It embraced the 
work of laying the foundations for the re- 
newal of private business and public and pri- 
vate intercourse generally between the two sets 
of enemy countries. The stipulations ultimate- 
ly framed for this purpose doubtless affect di- 
rectly a larger number of persons in the activities 
of their daily lives than do any other provisions of 
the treaty. They are concerned witli private busi- 
ness and private property rights of nationals of 
the belligerent countries and with commercial and 
social relations and treaty arrangements to which 
these countries were parties before the war. 

The Economic Drafting Committee was composed 
of Mr. Bernard M. Baruch, representing the United 
States; Mr. Georges Clementel, Minister of Com- 
merce of France; Sir Hubert Llewellyn Smith, 
permanent secretary of the British Board of Trade : 

81 



The Making of the Reparation- and 

Mr. Crespi, representing Italy; and Mr. Ivenejo 
Tatsumi, representing Japan. 

The committee divided its discussion under two 
broad heads : 

First, that of transitory measures covering a 
period of rehabilitation following the war; and, 
second, that of the re-establishment of relations 
broken off by the outbreak of the war. 

The subject of transitory measures involved not 
alone temporary prohibitions against discrimina- 
tory practices of Germany, but the question of the 
allocation among nations of raw material for a 
short period until the former belligerent countries 
could have an opportunity to readjust themselves. 
Proposals concerning these measures were based in 
large part upon the so-called Paris Economic Con- 
ference, which had looked forward to an economic 
alliance among the Allies and a boycott of Germany 
after the war had closed. The United States, of 
course, was not a party to the Paris Economic Con- 
ference, and at the time the intent of this confer- 
ence was not concurred in by America. 

The discussion of transitory measures contem- 
plated among other tilings a division of raw mate- 
rials by the interested nations. The American 
representative soon convinced the others that so far 
as the United States was concerned the development 
of such a scheme was not practicable and was at 
variance with the terms of the armistice. He made 
clear in particular the obstacles of dealing with do- 
mestic questions of this kind which were, so far as 
the United States was concerned, matters peculiarly 

82 



Economic Sections of the Treaty 

within the province of Congress. As being indica- 
tive of the possible attitude of Congress, lie called 
attention to its action at an earlier date in refusing 
to grant a credit of $1,500,000,000 for the purchase 
of raw materials in America for the benefit of 
Allied countries. 

The French particularly were very insistent 
upon the adoption of the proposed transitory 
measures and urged them vigorously, not only be- 
fore the drafting commission and the economic com- 
mission, but also before the Supreme Economic 
Council. While the position of the several coun- 
tries was appreciated, the American representatives 
in all three of these bodies took an unequivocal 
stand against these proposals, except Avith regard 
to certain measures for food relief. They felt that 
the action advocated should be undertaken through 
private rather than through public instrumental- 
ities. 

Another question which was discussed to some 
extent was the advisability of limiting the amount 
of materials that might be permitted to go into 
Germany as compared with other countries. The 
idea underlying suggestions with respect to this 
matter was to give the Allied and Associated 
countries for a temporary period an advantage over 
Germany iu the supply of raw materials. Pro- 
posals of this kind were opposed by the American 
and other representatives on the ground that an 
economic war should not be conducted against 
Germany after the conclusion of peace. Such pro- 
posals, apart from their being regarded as wrong 

7 83 



The Making of the Reparation and 

in principle, of course would necessitate negotia- 
tions respecting questions involving matters of 
domestic concern and would require Congressional 
action for their consummation. 

With reference to the subject of economic co- 
operation, it is only fair to state the position of 
some of the delegations in order to show the con- 
ditions which were forcing them to ask for such 
co-operation which they felt in all justice they were 
entitled to. 

There had been great industrial co-operation 
during the war. This was becoming more definite 
and more perfected as (lie war went on. Not alone 
Mas there a single command in (he field and on the 
sea, but we were gradually headed toward a cen- 
tral command, under American leadership, of the 
s1 rategy behind the line controlling the material re- 
sources of the world, of which there was continuing 
mobilization for the purposes of the war. This 
mobilization of the industrial resources of the 
world achieved such good results that the Allies 
believed the co-operation should be continued for 
a period of readjustment and rehabilitation. 

There is very little general knowledge of the 
extent to which this great industrial co-ordination 
had taken place. Not alone had there been a 
mobilization of the resources of America, but the 
United States and the Allies in their efforts to ob- 
tain success in the war had reached beyond their 
own borders. Through international co-ope ration 
they were commencing to control the production, 
allocation, and prices of many things throughout 

84 



Economic Sections of the Treaty 

the world, even of those things not produced within 
their own territories. This control was working so 
smoothly and to such general satisfaction that the 
Allies desired its continuation at least for a short 
period of reconstruction. 

The American representative contended that the 
control should end with the war, and that with 
peace there should be a restoration of personal 
initiative. As a matter of fact such control could 
not be continued without special Congressional 
legislation, to which the American representatives 
thought Congress and American producers would 
very properly be opposed. The control that had 
been in effect during the war was more or less 
voluntary, and born of the need of the hour. 

The following is the substance of a brief general 
statement by a French representative of the French 
position with regard to the necessity of economic 
relief and co-operation : 

It was not only a part of Fiance that was devastated, but 
the whole, for the whole of France had been turned over 
to war purposes. There was a lack of stability in France 
that had been brought about by a state of war for four and 
a half years. One tenth of the territory of France had been 
invaded by the enemy and destroyed, this being the region 
wherein lay the deposits of iron, coal, etc. France was 
obliged to import many times as much as she formerly did. 
All of her exports had been suppressed and no distinction 
could be made between France's devastated areas and 
France as a whole. The entire country had been thrown 
out of joint by the war. 

Aii extemporaneous statement of an Italian r. p- 

83 



The Making of the Reparation and 

resentiitive is so illuminating that its substance is 
given below : 

To my mind the most important point is the restoration 
of the economic regime, and this is a question that we must 
discuss first. Italy is now in a very serious condition. We 
had a debt at the end of December of 65,000,000,000 lire, 
and this will be increased by next December to 90,000,000.- 
000. The wealth of Italy was calculated during the war 
at SO, 000, 000, 000 and after the war at 120.000.000,000 
lire, or $24,000,000,000; and so we calculate we shall have 
a debt at the end of next December equal to three-fourths 
of our national wealth. 

If we reckon what the financial burden on the Italian 
people will be, we must figure first this debt of $18,000,- 
000,000, on which there will be interest and amortization 
charges, the latter at 2 or 3 per cent.; a general taxation of 
7 to 8 milliard lire; the general running expenses of the 
country amounting to 5.000.000,000 lire — altogether 
we shall have a general taxation of 12,000,000,000 to 
13,000,000,000 lire or $2,500,000,000. In this case each 
Italian would have to pay a lira of taxation per day. The 
average wage of an Italian during the war was 2 i<j lire per 
day. If you take children, women, and old people who do 
not work, you may state that during the war the earning 
capacity of the average Italian was 2 lire per day. Then 
each Italian will have to pay a tax of a lira a day, which 
is exactly one-half of his earnings. Suppose that the wages 
double, it will still be an unbearable taxation; for if the 
earnings go up, so will the expenses, since everything will 
cost more. 

So the restoration of the economic system is for Italy a 
question of life or death, and we think it must be done in 
two ways: We must restore our commercial balance — that 
is, the balance between imports and exports — and we must 
restore what we call the contributing capacity. We must 
have a system under which each Italian will be able to pay 
the tax to defray the general expenses as well as the debts 

S6 



Economic Sections of the Treaty 

of the country. We have been expending during the war, 
in the last years especially, six times the amount of money 
which we received from our exports; in other words, the 
amount of our imports has during the last year been six or 
seven times greater than our exports. So our debt is grow- 
ing enormously, and it will still grow enormously. We are 
still now importing six times as much as we actually export, 
because our industrial export has been cut to nothing, has 
been so destroyed by the war that we view the future with 
great anxiety. 

On the other hand, the contributing capacity is so low 
that we must find some way to reduce the taxation on the 
people, or some way to increase their earnings. So you can 
see that Italy cannot recover if this unhappy condition is 
permitted to continue. If the preliminary policy is not 
settled, we shall be not a free but a weak, contributor state, 
economically speaking. 

I need not remind you that Italy, having fought with all 
her energy and having given nearly all of her wealth for 
the war, is altogether a devastated country. From our 
viewpoint we cannot see that only the northern part of 
Italy has been devastated. It is all devastated. What the 
enemy has not devastated, the staggering taxes have. There- 
fore how is it possible for a country that has given so much 
of its wealth to come into any agreement under such 
desperate conditions? I quite expect that you will consider 
this tragic condition of Italy. We are prepared to do our 
best, but before we can you must give us the great help 
required. 

The Economic Drafting Committee submitted a 
report to the Supreme Council, whereupon the so- 
called Economic Commission was organized for 
the purpose of framing stipulations to deal with 
subjects which had been considered by the com- 
mittee as proper for incorporation into the treaty. 
Thomas W. Lamont and myself were designated 

87 



The Making of the Reparation and 

American members of the commission. Realizing 
the scope and technical nature of the work that 
would be involved, I had previously called to my 
assistance in my capacity as the American repre- 
sentative on the Economic Drafting Committee, 
the following gentlemen because of their expert 
knowledge of the subjects to be considered: 

Dr. Frank W. Taussig, then chairman of the 
United States Tariff Commission; Alex Legge, 
vice-chairman of the United States War In- 
dustries Board and general manager of the In- 
ternational Harvester Company, which has busi- 
ness establishments in every important country 
of the world; Leland L. Summers, a mechani- 
cal engineer of an international reputation, who 
had been the technical adviser of the War Indus- 
hies Board and who possessed a knowledge of Eng- 
lish, French, and German manufacturing proc- 
esses; Charles U. MacDowell, formerly head of the 
Chemical Division of the United States War In- 
dustries Board; Fred K. Nielsen, who is now the 
solicitor for the Department of State; Bradley W. 
Palmer, of Boston, who had been sent to Paris by 
the Alien Property Custodian, for whom he had 
acted as counsel; John C. Pennie, of New York, a 
noted expert in international and American patent 
law; and J. Bailey Brown, of Pittsburgh, an expert 
in patents, trade-marks, and copyrights. Prof. 
Allyn Young, already attached to the Peace Com- 
mission, served as an alternate for Mr. Lamont. 

The following countries were origiuallv given 
representation on the Economic Commission : The 

SS 



Economic Sections of the Treaty 

United States, the British Empire, France, Italy, 
Japan, Belgium, Brazil, CMna, Poland, Portugal, 
Rumania, and Serbia. 

The work of the commission was apportioned 
among sub-commissions, which presented their 
conclusions to the commission for its action. The 
report of the full commission was finally sub- 
mitted to the Supreme Council for its considera- 
tion substantially in the form in which the Eco- 
nomic Clauses appear in the text of the treaty. 

Part X of the treaty, designated Economic 
Clauses, comprises provisions in which the United 
States has a more direct and permanent interest 
than in any others, aside from the Covenant of the 
League of Nations. These provisions are concerned 
largely with technical subjects that enter into in- 
ternational relations. Such subjects were dealt 
with by men- possessing the necessary technical 
training. However, these stipulations are readily 
comprehended by the lay mind from the standpoint 
of their general purport and are discussed briefly 
from that standpoint. 

The so-called Economic Clauses of the treaty 
are not "impossible" of performance, as we some- 
times hear it said of the economic provisions of the 
treaty gonorally. Nor can it correctly be said that 
they are unjustly onerous upon Germany. Nor 
are they in derogation of the letter or the spirit of 
any of President Wilson's Fourteen Points. 

The several subdivisions of this interesting part 
of the treaty entitled Economic Clauses are desig- 
nated as follows: 

89 



The Making of the Reparation and 

(1) Commercial Relations; (2) Treaties; (3) 
Debts; (4) Property, Rights, and Interests; (5) 
Contracts, Prescriptions, Judgments; (6) Mixed 
Arbitral Tribunal; (7) Industrial Property. The 
comprehensive nature of the articles embraced by 
these designations is indicated by a mere enumera- 
tion of them. 

Commercial Relations. 

Among the most important provisions under the 
general classification of Commercial Relations are 
those pertaining to German customs duties and the 
regulation of questions relating to exports and im- 
ports generally. The salient features of these stip- 
ulations, which are found in Articles 264 to 270, 
may be briefly indicated. 

A temporary maximum rate of dnty of six 
months' duration on imports from the Allied and 
Associated Powers is prescribed— namely, the most 
favorable duties applied to imports on July 31, 
1914. This provision applies for a further period 
of thirty months to certain commodities, respecting 
which special agreements ^vitli Allied and Associ- 
ated Powers existed before the war, in addition to 
certain products which, it seems, found an exclu- 
sive or almost exclusive market in Germany before 
the war. Certain temporary tariff concessions are 
secured to products shipped into Germany from 
Luxemburg, and from territories ceded to France 
and Poland. Most-favored-nation treatment in 
matters relating to tariffs and laws and regulations 
with regard to prohibition pertaining to exports 

90 



Economic Sections of the Treaty 

and imports is secured to the Allied and Associated 
Towers for a period of five years. The general 
nature of these stipulations may be briefly indi- 
cated. 

No great severity appears to be involved in the 
requirement imposed on Germany to maintain for 
a period of six months the most favorable rates of 
customs duties which were in force for imports into 
Germany on July 31, 1914. And there seems to 
be no reason to question the sincerity of those na- 
tions, some of them sorely ravaged by w r ar, which 
insisted that the economic situation in their conn- 
tries made a definite German tariff for a temporary 
period highly important to them ; that such a period 
was necessary in order to avoid serious economic 
disturbance by a sudden change of tariff. At the 
end of this brief period Germany will be free to 
alter her rates. Probably at least six months' time 
to effect a readjustment will be required. 

For a period of five years from the coming into 
force of the treaty, products which originate and 
come from Alsace and Lorraine are exempted from 
payment of customs duties on importation into 
Germany up to the average amount sent annually 
into Germany from 1011 to 1913. 1 Similar conces- 

iAt the end of the Franco-Prussian war, similar arrange- 
ments were made for the admission into Fiance of 
goods originating in Alsace-Lorraine. The duration of 
such arrangements was shorter than that provided in 
the Treaty of Versailles, due to the fact that the 
industries of Alsace-Lorraine in 1871 were much less 
specialized than they are today, and required less time 
for readjustment. 

91 



The Moling of the Reparation and 

sions are made to Poland, with respect to territory 
ceded to her, for a period of three years, and for 
fire years to Luxemburg, which has for a long time 
enjoyed the benefits of the German Customs Union. 
The Germans do not appear to haye found seri- 
ously objectionable these provisions haying for their 
purpose the temporary protection of these terri- 
tories during - a transition period, so that the latter 
may not be abruptly deprived of their former mar- 
kets, which had previously existed through German 
channels. 

The provisions securing the application, for the 
period of three years, to imports of certain products 
from Allied and Associated countries of the most 
favorable rates of the German tariff which were 
in force in 1914, have a similar purpose. Certain 
products, the output of which in countries border- 
ing on Germany was especially adjusted to German 
needs, are by these provisions temporarily assured 
of markets enjoyed before the war. 

By stipulations in the nature of the so-called 
favored nation clauses found in the usual commer- 
cial treaties, Germany is forbidden to discriminate 
against the Allied and Associated Towers in mat- 
ters relating to imports and exports. She is obliged 
to adhere for a period of five years to a non-discrim- 
inatory regime, such as obtains at present under 
the laws of the United States and, I believe, under 
the laws of England and not a few of the Allied and 
Associated countries. By a number of treaties 
she was bound to adhere to such a regime before 
the war. Treaties of this character were wiped out 

92 



Economic Sections of the Treaty 

in the Treaty of Peace so far as the Allied and 
Associated Powers were concerned. The treaty 
affords a temporary substitute arrangement with 
regard to foreign trade relations. It is difficult to 
perceive any harshness in this arrangement. 

Summarizing the general effect of stipulations 
in the treaty relating to the foreign commerce, it 
appears that Germany exercises full sovereign 
rights over imports and exports, subject only to the 
transitory requirement that all of the Allied and 
Associated Powers must be treated on a footing of 
absolute equality among themselves and with other 
foreign countries, and to certain temporary limita- 
tions respecting gold exports and respecting the 
fixed customs duties and the temporary concessions 
to which I have called attention. 

Germany might prohibit all exportation or im- 
portation. She can make partial prohibitions, but 
such prohibitions must not be discriminatory 
against any of the Allied and Associated Powers 
as compared with any other foreign country during 
this temporary and transitory period. And she is 
free to fix any tariff rates subject to the temporary 
limitations just mentioned. 

It is of particular importance to such countries 
as Poland, Serbia, Italy, and France, which have 
suffered so greatly from the war, that Germany 
shall be restrained for a temporary period from em- 
ploying any methods of commercial discrimina- 
tion against them. Doubtless it can be confidently 
hoped that at the end of such a limited period the 

93 



The Making of the Reparation and 

economic disturbances resulting - from the war will 
be so adjusted and the passions engendered by the 
war so allayed as to permit the conclusion of rea- 
sonably satisfactory commercial arrangements be- 
tween the various belligerent countries. 

Mention may be made in this connection of Arti- 
cles 323 and 327, which refer to commercial rela- 
tions, but which are found in a section of the treaty 
under a different designation. They secure na- 
tional and most-favored-nation treatment to vessels 
of the Allied and Associated Powers with respect 
to cargoes carried by them, shipping charges, and 
regulations of various kinds. 1 

Articles 274 and 275 have for their purpose the 
protection of nationals of the Allied and Associ- 
ated countries against unfair trade practices in 
Germany. The German Government is required to 
adopt appropriate measures to protect the produce 
or manufacture of any of the Allied and Associ- 
ated Towers from all forms of unfair competition 
in commercial transactions. It is obligated to 
prevent the importation, exportation, manufacture, 
distribution, sale, or offering for sale in German 
territory of all goods bearing upon themselves de- 
scriptions or marks which have a tendency to con- 
vey, directly or indirectly, a false indication of the 
origin, type, nature, or special characteristics of 
such goods. 



iThese articles are limited in their unilateral form to a 
five-year period. At the end of the five years they apply 
only to such of the Allies as give reciprocal privilege. 

94 



Economic Sections of the Treaty 

A section of the treaty, embracing Articles 276 
to 279, contains a number of important provisions 
in the nature, broadly speaking, of those found in 
commercial treaties. These provisions secure to 
nationals of each of the contracting countries the 
right to do business in the other, unhampered by 
discrimination in matters of taxation and of prop- 
erty regulations of various sorts. 

Article 27S in this section of the treaty seems to 
have some exceptional interest to the United 
States, in view of our large alien immigration, and 
in view of the attitude of this country with re- 
gard to the effect of the naturalization of for- 
eigners. 

This article obligates Germany to recognize 
any new nationality acquired by her nationals un- 
der the laws of the Allied and Associated Powers, 
and to regard such persons as having, in conse- 
quence of the acquisition of such new nationality, 
in all respects severed their allegiance to their 
country of origin. The language of the article is 
carefully framed so as to eliminate any question 
of dual nationality on the part of a person who 
easts off his German allegiance. Although the ob- 
ligations of these provisions are binding on Ger- 
i many only, it seems possible that the article may 
have value as a precedent in dealing with the ques- 
tion of conflicts of nationality. 

In the section just mentioned the Allied and 
Associated Powers secure to themselves the right 
to send consular officers to Germany. 

95 



The Making of the Reparation and 

Ti, 

It was of course important that an arrangement 
should be provided for in the Treaty oi Peace with 

ird to the status of treaties o( all so 3 to which 
Germany and the Allied and Associated Powers 

e parties before the war. The subject was very 
carefully dealt with by Articles 282 to 295 in a wav 
that should leave little room for future compila- 
tions. All vexatious questions as to the effect of 
war on treaties ate eliminate 

atv enumerates a very considerable list 
' SO-called multilateral treaties — that is. interna- 
tional agreements between three or more nati< 
and it is declared that such agreements alone shall 
be applied between Germany and those of the Al- 
lied and Associated Pow ersw ho are parties thereto. 
The subject of bilateral treaties which Germany 
had concluded with each of the Allied ami Associ- 
ated Powers is dealt with in a different way. These 
agreements are in effect declared abrogated in the 
Treaty of Peace. The right is accorded to each of 
the Allied or Associated Powers to revive, by giv- 
ing notice to Germany within six months, anv 
treaty or convention which each of the Allied and 
Associated Towers may desire to continue in effect 
Treaty stipulations at variance with the Treaty of 
Peace may not be revived. 1 11 oases of difference of 
opinion on this point it is provided that appeal shall 
bo made to the decision of the League o( Nations. 

• for the revival of treaties . 
a useful procedure lor 1 aty relations 

96 



Economic Sections of the Treaty 

with Germany. With regard to numerous treaties 
such a readjustment is doubtless highly desirable. 
II was not regarded as unfair to Germany (hat only 
the Allied and Associated rowers should have the 
right to revive treaties. Apparently no injury can 
result to Germany from this situation. The treaty 
prevents nations from splitting up in a manner 
prejudicial to Germany any treaty it is desired to 
revive. The treaties that may be revived are inde- 
pendent agreements, such as commercial treaties, 
consular conventions, and extradition treaties. 
Generally speaking, they stipulate reciprocal rights 
in behalf of each of the contracting parties. If one 
kind of a treaty is revived and another is allowed 
to lapse because, perhaps, it lias become obsolete 
and is no longer responsive to present needs, both 
of the contracting parties are similarly affected. 

Furthermore, treaties of this character generally 
contain stipulations under which they can be abro- 
gated on a year's notice by either parly. Germany 
will therefore be able to denounce a. treaty which 
she does not desire lo have continued in existence 
afler it has been revived by an Allied or Associated 
Power. 

It is my understanding that the arrangement lias 
peculiar advantages for the United States. Our 
treaty relations with Germany are based almost en- 
l Lrely on old I reaties concluded a long time a^o with 
the independent slates, which were united to form 
the (Herman Empire. T am informed that vexatious 
questions have arisen from time to time as to the 
Legal effect of these treaties with regard to their 

97 



The Making of the Reparation and 

application between our Government and the Gov- 
ernment of the German Empire, with which they 
were not negotiated. 

The provisions in the Peace Treaty under the 
heading of Commercial Relations, taken as a whole, 

would adequately protect our Government's inter- 
ests during a period in which treaty relations with 
Germany might be directly adjusted between the 
two Governments on a more satisfactory basis than 
that existing before the war. The situation result- 
ing from these stipulations which have been dis- 
cussed may be briefly summarized. 

Provision is made in the treaty for equality of 
treatment in all matters relating to customs duties 
and shipping charges. By comprehensive stipula- 
tions everything- needed in the way of a naturalisa- 
tion treaty is provided. Concise provisions deal 
Aviih rights of American citizens to do business in 
Germany, and the protection of their property 
rights generally. The right to send consular offi- 
cers to Germany is secured. 

The section devoted to treaties contains some fur- 
ther miscellaneous provisions of more or less 
interest which do not affect the general situation 
outlined above. They relate chiefly to agree- 
ments concluded by Germany with the Allies. Ger- 
many is required to recognize as abrogated agree- 
ments concluded by her with Austria. Hungary, 
Bulgaria, or Turkey since the first of August. 1014, 
until the coming into force of the Peace Treaty. 
She must similarly recognize as abrogated agree- 
ments concluded with Uussia or with any state or 

OS 



Economic Sections of the Treaty 

Government of which the territory previously 
formed a part of Russia or with Rumania before 
August 1, 1914, or after that date until the coming 
into force of the Peace Treaty. 1 She must secure to 
the Allied and Associated Powers the benefits 
granted to Austria, Hungary, Bulgaria, or Turkey 
by agreements concluded before August 1, 1914. 

Debts. 

By Article 206 and the Annex thereto a scheme 
is provided for the settlement of debts due by na- 
tionals of the enemy countries to each other as 
well as certain public debts. The purpose of the 
scheme is mainly to facilitate an adjustment of pri- 
vate commercial transact ions in a complete and ex- 
peditious manner, without private litigation, and 
without, the difficulties which might arise out of 
such litigation as a result of the application of 
diverse rules and principles by the municipal 
tribunals of the various countries. The plan of 
settlement is, briefly stated, as follows: 

Clearing offices are established for the {settle- 
ment, of debts between each Allied and Associated 
Government and Germany. Each of the contract- 
ing parties establishes a clearing office for the col- 
lection and payment of debts. Sums due to the na- 
tionals of one of the contracting parties by nationals 
of the other will be debited to the clearing office 
of the country of the debtor, and paid to the credi- 



lThis abrogates the Brest-Litovsk and Bucharest treaties. 
8 99 



The Making of the Reparation and 

tor by the clearing office of the country of the 
creditor. 

The contracting- parties obligate themselves to 
guarantee payments of all debts due by their na- 
tionals, with certain exceptions. They farther agree 
to forbid payment of such debts by their nationals 
aad to forbid all communication between the in- 
terested persons with regard to the settlement of 
debts otherwise than through clearing offices. 

Ii is optional with an Allied or Associated state 
as to whether it will be a party to this scheme of 
settling debts. Unless within one month from the 
coming into force of the treaty it gives notice that 
it desires to participate in the clearing office scheme, 
the provisions in respect thereof will not apply be- 
tween it and Germany. 

The proceeds 01 property of German nationals 
which is within Allied and Associated countries, 
and which is liquidated in accordance with pro- 
visions of the treaty relating to the retention and 
liquidation of property of enemy nationals, may be 
used by such countries to pay debts owing to their 
nationals. Such proceeds will be accounted for 
through the clearing offices. 

The merits of this plan can probably be definitely 
determined only in the light of experience. Much 
confusion and controversy, both of a private and 
a public nature, might perhaps result from the 
efforts of persons to effect private settlement in the 
future directly or through, the tribunals of each 
nation. On the other hand, the obligation of a 
nation to guarantee debts of its nationals might 

100 



Economic Sections of the Treaty 

prove a difficult and disagreeable one to carry into 
effect. And action by a Government to prevent pri- 
vate adjustment of debts might result in an un- 
fortunate interference with, private transactions. 

Probably a controlling consideration with the 
Government of the United States, should it become 
a party to the treaty, would be the objection to a 
scheme which would make necessary the use of 
private property of enemy nationals for the spe- 
cific purpose of satisfying debts, or in any way 
place restriction on the disposition of such prop- 
erty by this government. Provisions of the treaty, 
to which I shall later refer, were so framed that 
Congress will have a free hand in disposing of such 
property, if the clearing-office scheme shall not be 
adopted. 

With respect to the attitude of the United 
States relative to these stipulations, it seems per- 
tinent to take into consideration that the situation 
of nationals of the Allied Governments at the out- 
break of the war appears somewhat different from 
that of citizens of the United States when this 
country became a belligerent. 

The Allies were suddenly plunged into war. 
The Governments of Great Britain and France, 
in order to avoid most serious financial disasters 
at the beginning of the war, had found it neces- 
sary to guarantee a great many private obliga- 
tions, such as acceptances by bankers whose 
principals were in Germany, and to protect the 
interests of their citizens in various ways. Long 
prior to the end of the war, these countries had 

101 



The Making of the Reparation and 

studied in detail a plan under which debts could 
be adjusted after the war. The United States 
entered the conflicl two and a half years after the 
outbreak of the war in Europe, and its citizens had 
then had an opportunity to adjust their business 
affairs with Germans to war conditions. Contracts 
made for some time prior to our entrance into the 
war must seemingly have been entered into with 
some knowledge of the risks incurred. 

The clearing house plan may be desirable and 
necessary for some o\' the Allied countries, but it 
was considered by the American representatives at 
Paris that it might be undesirable, if not impos- 
sible, for the United States. For that reason they 
took steps to have the adoption o( the scheme made 
optional. 

Property. Eights, and Interests. 

Articles 297 and 298 and the Annex following 
them deal with the disposition of the property of 
enemy nationals found in the territory of each bel- 
ligerent nation at the outbreak of war. 

During the war the principal belligerent coun- 
tries had generally taken posession of all or some 
part of private enemy property within their respec- 
tive dominions, and in some countries sales of some 
such property had been made. When the United 
States entered the war, the taking over of private 
property and businesses had already proceeded far 
in other countries, and Congress authorized similar 
measures here. It became necessary to provide in 
the treaty for the situation created by such acts. By 
the Trading with the Enemy Act which contained 

102 



Economic Sections of the Treaty 

this authorization it was provided that claims of 
enemies for seized property should be settled after 
the end of the war as Congress should direct. This 
was construed by American representatives on the 
Peace Commission to mean that the policy of our 
Government in dealing with such property was not 
to be determined until after the end of the war, 
when various fads and conditions which could not 
be known before that time could be definitely ascer- 
tained. 

Therefore, in the absence of any defined policy 
by the United States, we thought it our duty to 
preserve for Congress unimpaired freedom to deal 
with all questions relating to enemy property. This 
seemed the more clearly our duty, since we had no 
means of ascertaining facts, isuch as those respect- 
ing the treatment of American property by Ger- 
many, which might have bearing on a final de- 
cision. Consequently, we thought it proper to op- 
pose all suggestions which were made requiring a 
permanent disposition of the property in any way. 

Germany is obligated to restore sequestered 
property belonging to nationals of the Allied and 
Associated Powers on demand of the owners "if it 
still exists in specie," and to pay over the proceeds 
of property that has been sold. She must make 
compensation for damages inflicted upon property 
by the application of "exceptional war measures." 
Such damages are to be determined by a tribunal of 
three members. 

The Allied and Associated Powers "reserve the 
right to retain and liquidate" the property of Gcr- 

103 



The Making of the Reparation and 

man nationals within their territory, and to hold 
such property "as a pledge" for the payment of cer- 
tain obligations due to their nationals. These ob- 
ligations are: Claims of such nationals in respect 
of damage committed to their property within 
German territory ; debts owing to them by German 
nationals, and claims growing out of acts com- 
mitted by the German Government or any Ger- 
man authorities since July 31, 1914, and before 
an Allied or Associated Power, desiring to make 
such claims, entered the war. 

The last mentioned class of claims would cover 
any claims the United States might desire to make 
on account of the sinking of such vessels as the 
J.itsilania, the Fri/r, the Susse®, and the Leelana/W, 
or on account of other pre-war arts committed by 
the German authorities in violation of the rights of 
American citizens. 

German property and the net proceeds re- 
sulting from its liquidation may further be 
charged by the Allied and Associated Powers 
with the payment of claims of their nationals with 
regard to their property in territory of other enemy 
Powers, in so far as those claims are otherwise un- 
satisfied. Justification of this provision, if advan- 
tage is taken of it, will have a basis on the theory 
of joint responsibility resulting from the fact that 
German}'- and her allies acted as a unit in carrying 
on the war, and showed by their conduct toward 
private enemy property that they acted on a similar 
theory as to joint responsibility on the part of the 
Allied and Associated Powers. 

104: 



Economic Sections of the Treaty 

Any property or proceeds of property not used 
by an Allied or Associated Power for the purposes 
just mentioned may be retained,' and if retained the 
cash value thereof must be used to pay the repara- 
tion demanded of Germany. 

Germany undertakes to compensate her nationals 
for property retained by the Allied and Associated 
Governments. 

The treaty does not contemplate the taking of 
property of enemy nationals without some form of 
compensation. The question of taking of property 
is left to the determination of each of the Allied or 
Associated Powers in its own discretion, and if in 
any case the property is taken for purposes per- 
mitted by the treaty Germany is required to make 
compensation. 

The treaty provides that the proceeds of prop- 
erty of German nationals "shall be subject to 
disposal by such Power in accordance with its 
laws and regulations." 

Therefore, if the United States should ratify the 
treaty, the power of Congress to deal with German- 
owned property in the United States would be the 
same as it was prior to the conclusion of the treaty. 
There is, therefore, no conflict between the treaty 
and the Trading with the Enemy Act, by Section 
12, of which it is provided, as has been pointed out, 
that the ultimate disposition of seized property 
shall be determined by Congress after the war. 

The treaty authorizes seizure and liquidation of 
property on a more extensive scale than that con- 
templated by the Trading with the Enemy Act. 

105 



The Making of the Reparation and 

Tudor the act the Alien Property Custodian has 
seized only property of persons resident within 
German territory and territory under German 
military occupation, and property of persons whom 
the President has, pursuant to the act, included 
within the term "enemy." Under the treaty the 
Allied and Associated Towers reserve the right to 
retain and liquidate the property of German 
nationals within their territories, irrespective of 
the residence of the owners. 

The disposition of such property by each of the 
Allied and Associated Powers obviously raises a 
grave question. Irrespective of whether under in- 
ternational law a belligerent country has a strict 
legal right to confiscate property of enemy na- 
tionals within its territory, we know that confisca- 
tion has been generally severely condemned in 
modern times. The practice of confiscation has 
virtually become obsolete, except in the case of 
reprisals which can be justified by the disregard of 
private rights. 

As heretofore observed, under the treaty the 
Government of the United States is not committed 
to any course which might be regarded as confisca- 
tory. Congress may decide that the property shall 
be used for any or all of the purposes specified in 
the treaty, and it may provide for the return of all 
or a part of the property to its German owners. 

The principle of the inviolability of private prop- 
erty which a nation finds within its territory on 
the outbreak of war has always been upheld by the 
Government of the United States. And our Gov- 

106 



Economic Sections of the Treaty 

eminent has throughout its existence as a nation 
championed the establishment of a similar im- 
munity for private property at sea. Whether our 
Government will abandon these principles and re- 
sort to the use of the property of enemy nationals 
which lias been sequestered by the Alien Property 
Custodian during the war can be settled by Con- 
gress alone. 

In view of the conditions specified in the treaty 
under which the Allied and Associated Powers re- 
serve the right to retain property of enemy 
nationals, the retention of such property would not 
constitute absolute confiscation. The property can 
be taken to pay just claims against Germany, debts 
against German nationals, and the general repara- 
tion obligations; and the German Government un- 
dertakes to pay its nationals for property so used. 
It was admitted by Germany that she could not 
meet her obligations without drawing on the 
property of her nationals abroad. Some of the 
Allied Powers utilized the foreign investments of 
their nationals during the war, giving their own 
Government securities in exchange. 1 

As has been pointed out, it is optional with the 
Allied and Associated Powers as to whether or not 
they will use private property for the payment of 
claims in the manner authorized by the treaty. 
Perhaps an effort will be made by the United 
States, should it become a party to the treaty, and 
by other nations, to effect some settlement of claims 



lSee pp. 338, 339, 340, 341, and 342 in the Addenda. 

107 



The Making of the Reparation anil 

with the German Government, which will render 
unnecessary the appropriation of all or any private 
property for such purpose. It seems possible that 
under the terms of the treaty the assets of.-'Ger- 
many are so pledged for other reparation purposes 
that none would be available for this particular 
purpose. However, an interpretation might be 
given the treaty so ;is to make possible a settlement 
of claims for which German-owned property is held 
as a pledge, so that the pledge would not neces- 
sarily need to be retained in order that such a 
settlement might be effected. 

Possibly some nations may sec tit io draw a dis- 
tinction between certain classes of property or be- 
tween certain classy of persons and effect a dispo- 
sition of property on a basis oi' such a distinction. 
There is a large amount of German Government or 
quasi-German Governmenl property and perhaps 
some apparently privately owned property fostered 
by the German Government, that can he used for 
the purpose o\' paying claims. This class of prop- 
erty might well be distinguished from strictly 
private property. 

Contracts. Prescriptions. Judgments. 

The considerations relating to the adjustment of 
pre-war contracts were somewhat similar to those 
respecting the settlement o\' pre-war debts. For the 
European countries the war began suddenly ami un- 
expectedly, abruptly terminating all business re- 
lations with Germany. For them the war had 
lasted more than four years, and tbe possible injus- 

10S 



Economic Sections of the Treaty 

tice of canceling some pre-war contracts that might 
have survived was considered a negligible factor in 
view of the great advantage of constituting a def- 
inite legal status for all such pending matters. In 
this situation they concluded that in the interest of 
all concerned all pre-war contracts should be an- 
nulled. On the other hand, in the United States 
the situation had adjusted itself to a great extent 
to war conditions in the two and a half years dur- 
ing which the war had lasted before we entered it. 
Undoubtedly many contracts of an innocent char- 
acter made before our entrance into the war were 
still in existence. 

Under our jurisprudence tho state of war serves 
to dissolve some classes of contracts and only to sus- 
pend others, and our judicial decisions have ruled 
that those contracts in which no public interest is 
involved, and the performance of which, was not 
rendered inequitable on account of new conditions 
produced by the war, it would be unjust and in- 
equitable to disturb. Consequently, the Americans 
were of opinion that to require the general cancel- 
lation of all existing contracts, including those 
which our courts had decided should not be dis- 
turbed, would constitute an unnecessary and 
unjustifiable interference with the private rights of 
our citizens, and furthermore might entail substan- 
tial claims against our Government. 1 



lOur views on that subject were expressed in a con- 
temporaneous memorandum that will be found in the 
Addenda, page 343. 

109 



The Making of the Reparation and 

Articles 299 to 303, inclusive, and an Annex fol- 
lowing them, deal with contracts entered into with 
German nationals prior to the war by nationals of 
the Allied and Associated countries. The general 
purpose of these provisions is, as in the ease of 
provisions with regard to debts, to prescribe cer- 
tain definite rules, so that questions concerning 
such matters as are not governed by international 
law may not be left altogether to the probable 
conflicting decisions of national tribunals in the 
respective countries. 

Provision is made for a general dissolution of 
contracts from the time that the parties to a con- 
tract became enemies. Exception to such dissolu- 
tion is made as to debts or other pecuniary obli- 
gations arising out of any act done or money paid 
under a contract, and further as to particular 
classes of contracts specified in the treaty. 

A general exception to the cancellation of con- 
tracts is provided for in the case of any contract of 
which the execution "shall be required in the gen- 
eral interest," within six months from the date of 
the coming into force of the treaty, by Allied and 
Associated Governments of which one of the parties 
is a national. 

If the execution of the contract thus kept 
alive would, owing to the alteration of trade condi- 
tions, cause one of the parties substantial injury. 
a mixed arbitral tribunal will be empowered to 
grant the prejudiced party equitable compensa- 
tion. 

As in the case of the provisions relating to debts, 

110 



Economic Sections of the Treaty 

it will be difficult to determine, except in the light 
of experience, the advantages or disadvantages of 
these stipulations respecting the dissolution of 
contracts. The United States, Brazil, and Japan 
are, by a provision in the treaty, excepted from the 
greater portion of them. This provision was in- 
serted with a view to avoiding any doubtful ques- 
tions that might arise from the interference with 
private rights by treaty stipulations, "having re- 
gard to the provisions of the Constitution and law 
of the United States of America, of Brazil, and of 
Japan," as stated in Article 299(c). It is to be 
hoped that American citizens will be largely suc- 
cessful in adjusting their pre-war contractual rela- 
tions with German nationals directly, or through 
proper judicial tribunals. 

It should be observed that, in case the United 
States should become a party to the treaty, it will 
not be entirely excepted from these stipulations re- 
specting contracts. It will not be excluded from 
Article 301, which prescribed certain rules regard- 
ing negotiable instruments; nor from Article 302, 
which provides that, if a judgment in respect of 
any dispute which may have arisen has been given 
during the war by a German court against a na- 
tional of an Allied or Associated state in a case in 
which he was not able to make his defense, the 
Allied or Associated national who has suffered 
prejudice thereby shall be entitled to recover com- 
pensation to be fixed by a mixed arbitral tribunal. 

Admittedly some of these provisions relative to 
the dissolution of contracts are one-sided. An. 

Ill 



J 



The Making of the Reparation and 

illustration is the provision which confers only on 
the Allied and Associated Powers the right to main- 
tain in force certain contracts, "in the general in- 
terest" (Article 299, b). Another is that which 
provides a remedy against the decisions of German 
tribunals rendered during the war, but no such 
reciprocal remedy against the decisions of courts in 
the Allied and Associated countries (Article 302). 
Such provisions will doubtless be found objection- 
able to persons who hold the view that the treaty 
should hare been framed altogether on the theory 
that the Allied and Associated Powers should not 
have permitted themselves to take any steps for 
the protection of their nationals, the benefits of 
which should net be accorded also to German 
nationals. Such persons doubtless fail to take into 
full account, among other pertinent things, the 
lack of faith, at the time of the treaty negotiations, 
on the part of all the Allied and Associated coun- 
tries in the German Government and the German 
people. 

Mixed Arbitral Tribunal. 

By Article 304. a Mixed Arbitral Tribunal is es- 
tablished between each of the Allied and Associated 
Powers, on the one hand, and Germany, on the 
other hand. The tribunal is composed of three 
members, one being appointed by each of the Gov- 
ernments concerned, and the third, who shall net 
as president, being chosen by agreement between 
the two Governments, and. failing such agreement, 

112 



Economic Sections of the Treaty 

by the Council of the League of Nations or by Mr. 
Gustavo Ador, the former President of Switzerland. 
The third member must be a national of a country 
that remained neutral during the war. 

This tribunal is given jurisdiction to deal with 
questions, to which I have called attention, with re- 
spect to claims for damages to property of nationals 
of the Allied and Associated Powers in Germany, 
debts owing by enemy nationals to each other, and 
contractual relations between them. Perhaps 
among the functions of the court claims for dam- 
ages done to property in Germany is of most in- 
terest to American citizens. 

Concise rules governing the procedure of the 
court have been formulated. Certain authority is 
also conferred upon the court to prescribe such 
rules. It is provided that the language in 
which the proceedings are to be conducted shall, 
unless otherwise agreed, be English, French, Italian, 
or Japanese, as may be determined by the Allied 
or Associated Towers concerned. There w T ill 
probably be no difficulty in any given case in 
reaching an agreement as to the use of one of the 
well-known tongues in which the proceedings of 
similar tribunals are generally conducted. French 
will doubtless be the language most generally em- 
ployed by these mixed tribunals. American citi- 
zens, if the United States ratifies the treaty, will 
be enabled to present their cases in English. This 
shouTrl be of considerable convenience to them, and 
it would entail no hardship on Germany. 

A method just and satisfactory to the nations 

113 



The Making of the Reparation and 

concerned for the determination of private rights 
of various kinds seems to have been provided by 
the establishment of this tribunal. 



Industrial Property. 

Articles 306-311, inclusive, deal with the read- 
justment of the rights of the citizens of all of the 
nations at war, in the matter of industrial, literary, 
and artistic property — that is, patents, trade-mark 
registrations, and copyrights. 

It is important to bear in mind that these ar- 
ticles deal not only with rights to industrial prop- 
erty as between Germany and the Allied and Asso- 
ciated Powers, but also with rights to industrial 
property as between the Allied and Associated 
Powers themselves. 

From the very outbreak of hostilities between 
Germany and the Allies, the filing of appli- 
cations for letters patent, and for the registra- 
tion of trade-marks and copyrights in Germany, 
was greatly hampered by censorship and blockade, 
and w T as ultimately prohibited, in so far as the 
United States was concerned, by a presidential 
proclamation shortly after the entry of the United 
States into the war. So also, the payment of Gov- 
ernment fees for the maintenance in force of Ger- 
man patents owned by citizens of the United States 
was inhibited by the proclamation. 

Furthermore, inasmuch as the manufacturing fa- 
cilities of the Allies were being increasingly devoted 
to the production of materials for carrying on 

114 



Economic Sections of the Treaty 

the war, American inventors in other lines could 
find no field for the exploitation of their 
invention in any of the belligerent countries, 
and refrained from filing applications there- 
for within the periods provided for that purpose in 
the existing treaties ; nor could the American own- 
ers of patents in the Allied countries conform to the 
laws of those countries which, in most cases, re- 
quired the actual exploitation of the invention on a 
commercial scale in order to maintain the patent in 
force. Consequently, American owners of patents 
granted either by Germany or by the Allied and 
Associated Powers discovered that, as the result of 
the war, their patents had, to a large extent, become 
void, and that their rights of priority for filing 
valid applications in Germany and in the countries 
of the Allied and Associated Powers had for the 
most part lapsed. 

This portion of the treaty restores to American 
citizens the lapsed patents upon the payment of 
normal fees required for that purpose. It also per- 
mits American citizens to file in Germany and in 
the Allied and Associated countries applications for 
letters patent with the same claim of priority 
which, they would have possessed if filed within the 
periods provided for by treaties, conventions, or 
statutes, relating to the matter. The only restric- 
tion upon the rights thus restored is that they shall 
be subject in the case of patents and designs to the 
imposition of such conditions as each Allied or As- 
sociated Power may deem reasonably necessary for 
the protection of persons who have manufactured 

9 115 



The Making of iJw Reparation and 

or made use of the invention during the period when 
the rights had lapse J. 

The rights of United States citizens to the con- 
tinued protection afforded by the patents which 
they own abroad, and the acquisition of other 
patents which they were practically prevented 
from acquiring during the war. is. therefore, taken 
of by the treaty: and the rights of third 
parties, both in this country and abroad, who have 
had such inventions in use. are properly left to the 
control of the particular Allied or Associated 
Powers concerned. 

American citizens are particularly concerned 
with this revival of foreign patents because, as a 
consequence o( the war. foreign patents, in most of 
the countries, became void for failure to pay the re- 
newal fees, and for failure continuously to exploit 
the subject matter of the patent. In this regard, 
the citizens of foreign countries, including Ger- 
many, had the absolute advantage that United 
States patents are granted for an unrestricted term 
of seventeen years, without any requirement for 
exploitation o\' the invention and without renewal 
fees of any kind. The articles o( the treaty provid- 
ing for the revival of lapsed patents owned by 
citizens of the United States are. therefore, in the 
direct interest oi the citizens of the United States 
and to their ureal advantage. 

During the war the Federal Trade Commission. 
by authority of law. granted licenses to United 
States citizens under a large number o\ United 
States patents owned by German nationals. So 

116 



Economic Sections of the Treaty 

also during the war the Alien Property Custodian, 
by like authority, .seized and sold or otherwise liqui- 
dated many German-owned patents. Article 30G of 
the treaty provides that all acts done by virtue of 
special measures taken during the war under legis- 
lative, executive, or administrative authority of any 
Allied or Associated Power in regard to the rights 
of German nationals in industrial, literary, or 
artistic property, shall remain in force and shall 
continue to maintain their full effect. Conse- 
quent ly, these acts of the Government of the United 
States, through the Federal Trade OommissiOD and 
the Alien Property Custodian, are recognized as 
valid, continuing and unrevoked by the conclusion 
of peace. 

II became necessary dming the war for the Allied 
and Associated Powers to make use of all of the 
facilities at their command to insure its successful 
outcome. In so doing, it is quite probable that in- 
ventions covered by various German patents were 
employed. Under peace conditions it would have 
been necessary for the Government of the United 
Stales to pay to the owners of these patents many 
millions of dollars in the form of royalties, profits, 
or damages for such infringement. It is, of course, 
unthinkable that the Government of the United 
States, or any one acting under its authority, should 
he called upon to pay tribute to the enemy for 
tilings done in the prosecution of the war. Article 
306 of the treaty therefore precludes the making of 
any claim in this regard by Germany or German 
nationals against the United States or any other of 

117 



The Making of the Reparation and 

the Allied or Associated Powers (or against any 
person acting in their behalf or with their assent) 
for infringement of patents thus used, or for the 
sale or use of any products incident to the manu- 
facture thereof. 

This provision, however, is restricted to aets done 
by the Government or on its behalf or with its as- 
sent. It does not extend to individual infringements 
of patents having nothing to do with war activities 
and therefore not concerned with the national de- 
fense, and which are, therefore, not in the quasi- 
contraband class. In so far as the United States is 
concerned. German-owned patents not already dealt 
with by the Federal Tre.de Commission or by the 
Alien Property Custodian, and which do not come 
under the category of those used by the Government 
of the United States, or on its behalf or with its 
consent in the prosecution of the war, are outside 
Of the provisions of Article 306. They are subsist- 
ing private rights not affected by the provisions of 
the treatv. 

i 

Subject to the provisions of national legislation 
to the contrary, funds resulting from the applica- 
tion of war measures to German industrial prop- 
erty rights are dealt with in the same way as other 
sums due to German nationals are directed to be 
dealt with in other provisions of the treaty to which 
I have called attention. And, similarly, snms pro.- 
duced by any measures taken by ilie German Gov- 
ernment in respect of the rights of nationals of the 
Allied and Associated Powers are treated in the 
same way as other debts due from German na- 

11S 



Economic Sections of the Treaty 

tionals. Obviously, industrial property has no 
special characteristic which should take it out of 
tin' treatment accorded to property in general, so 
that these provisions may be regarded as merely 
confirmatory of the provisions to the same effect 
in other parts of the treaty relating to property in 
general. 

By a provision of some exceptional interest, the 
Allied and Associated Powers reserve the right to 
impose such restriction on industrial, literary, and 
artistic property, of German nationals "as may be 
considered necessary for national defense or in 
the public interest, or for assuring the fair treat- 
ment by Germany of the rights of industrial, lit- 
erary, and artistic property held in German terri- 
tory by its nationals, or for securing the due ful- 
fillment of all the obligations undertaken by Ger- 
many in the present treaty." 

In the course of the war it was learned that, in the 
past, improper use had been made b} r Germans of 
their patents in foreign countries, by combinations 
intended to suppress or hamper the development of 
foreign industries. The provision above referred to 
reserves to each of the Allied or Associated Powers 
the right to impose, after the conclusion of peace, 
conditions or restrictions on the employment of 
German-owned industrial property in the several 
Allied or Associated countries, in cases where the 
national defense or the public interest may so re- 
quire. The municipal law of Germany has always 
had such a reservation, but it is lacking in the legis- 
lation of the United States. 

119 



Making of the Reparation and 

In s - the United States is erned, 

. it is important thai the treaty makes 
this reservj I that it is accepted by Ger- 

many, so that in case any improper use by 

v van patent - - si mid 

in take plat . the power to deal with it would 
■ - • \ vd by agreement, and eon Id be put 
into effect by an act of Congress Inasmuch as 
Germany has always had a similar reservation, the 
t of this part ot" the treaty is to plaee the two 
countries on pr* illy the same footing. There is 
no reason to infer from this part of the treaty a pur- 
se on the part of the Allied and Associated 
Powers to deal with German rights other than in a 
spirit of justice, and it is unthinkable that these 
rights should be otherwise dealt with by the Gov* 
eminent of the United S 

Articles 309 and 310 of the treaty were not eon- 
sented toby the United States, and it is particularly 
stipulated in those articles that they shall not ap- 
ply as between the United States on the one hand, 
and Germany on the other. 

Article 309 provides that no action shall bo 
brought and no claim made by persons residing 
carrying on business within the territory of Ger- 
many on the one part, and within the terri; the 
Allied and Ass 1 Powers on the other, or by 
persons who are citiiens of such powers 
lv. or by any one deriving title during the war from 
such persons, by reason of any action which has 
taken plaee within the territory of the other party 
between the declaration of war and the coming into 

120 



"Economic Sections <>f the Treaty 

effect of the treaty, which might constitute an in- 
fringement <>l' the rights of industrial, literary, and 
arl isi ic property, either existing at any time during 
I in- war or revived thereafter. 

Iu other words, Article 309 includes a reciprocal 
release as between Germany on the one hand, and 

the Allied and Associated 1'owers on the oilier 

hand, of causes of action growing out of the 

infringement <>l' patents, and other forms Of indus- 
trial, literary, and artistic property during the 
war. II was deemed advisable <>n both ethical 
and legal grounds to except the United Slates 
from this article. The acceptance ol* the article 

would have amounted to an agreement by the 
United States that no suits should be brought 
Cor infringement of American-owned German 
pateids in exchange for a similar agreement by 
Germany that no suits should be brought Tor in- 
fringement of German-owned American patents, for 
the period covering I he war. 

It seemed arbitrary for the United States to 
barter the rights of its citizens to sue in Ger- 
many for infringement committed on German 
soil during the war, in exchange for the right 
of German citizens to sue for infringe at com- 
mitted on United States soil during the war. 
We were unable to see why llie right of an 
American citizen to sue in Germany for infringe- 
ment of his German patent- on a typewriting ma- 
chine, for instance, should be exchanged for the 
right of a German citizen to sue for infringement 
of his United States patent on a process for refining 

121 



The Making of the Reparation and 

oil. Moreover, it is doubtful whether the treaty 
power of the United States is of so broad a scope 
as to permit of a sacrifice of the property rights of 

its own nationals without providing compensation. 
Article 310 (from which, as above noted, the 

United States is excepted) proposes in substance 

that all license contracts for the exploitation of in- 
dustrial property and for the reproduction of liter- 
ary and artistic works entered into before the dee- 
laration of war between German subjects on the 
one part, and the nationals of the Allied and Asso- 
ciated Powers on the other, are to be considered as 
canceled by the war: with a further provision that 
the beneficiary of the license shall be entitled to a 
period of six months in which he may exacl from 
the patentee a new license under conditions wlihh, 
in default of agreement between the parties, ate to 
be fixed by a special tribunal established for that, 
purpose by the Government of the country in which 
the patent or the like had been granted. 

It may well be doubted whether the outbreak of 
the war of itself terminated license contracts. If 
not terminated, the license privileges possessed by 
eiti - f the United States under Gorman-owned 
United States patents are no doubt valuable to the 
licensees, and we were unable to find any good rea- 
son for their annulment, even if it were within the 
treaty-making power of the rutted States. More- 
over, it seemed to us more than doubtful whether 
the provision in Article 310 for the compulsory re- 
newal of such licenses, upon new terms to be exact- 

122 



Economic Sections of the Treaty 

od from the licensor, would be acceptable to public 
sentiment in the United States. 

I have given a brief and rough outline of provi- 
sions originally framed by the so-called Economic 
Commission for insertion into the treaty. These 
provisions deal with political questions, commer- 
cial and industrial subjects from the standpoint of 
international relations, and private rights in vari- 
ous aspects. They involve technical and difficult 
questions of domestic law, of international law, and 
of international practices. To harmonize views, 
policies, interests, and legal problems was no 
simple task. On the one hand, it may appear to 
some that certain subjects were improperly incor- 
porated into a treaty of peace, or were dealt with 
too much in detail. On the other hand, it would 
seem that there should not be too ready criticism 
of the purpose of the framers of the treaty in seek- 
ing by comprehensive stipulations to avoid as far 
as possible future international or private complica- 
tions resulting from the interruption by war of in- 
tercourse between the rowers and between their 
respective nationals. 

The statement is often heard that the Americans 
did not protect their national interests in the peace 
negotiations. This statement, I contend, is at vari- 
ance with the facts. As regards reparation and 
economic provisions of the treaty in which, as has 
been seen, the United States lias such an extensive, 
direct, interest, it may be affirmed that no justifica- 
tion for such a statement can be found in the light 
of even the most critical and technical examination, 

123 



REPARATION CLAUSES 



Summary 
of Contents. 



SEPARATION. 



Comment. 



Section I. 



GENERAL PROVISIONS. 



Article 231. 



Germany's 
responsi- 
bility. 



The Allied and Associated Governments Amora i 
affirm and Germany accepts the responsi- fS?iithe llty 
bility of Germany and her allies for caus- oTt^X™ 

,, ., , , , . , . , ,i notafinan- 

lnc- all the loss and damage to which the ciairespon- 

* ° sibility. 

Allied and Associated Governments and 
their nationals have been subjected as a 
consequence of the war imposed upon them 
by the aggression of Germany and her allies. 

Article 232. 



Germany's 
inability 
to make 
complete 
reparation. 



Germany's 
reparation 
obligations. 



The Allied and Associated Governments 
recognize that the resources of Germany 
are not adequate, after taking into account 
permanent diminutions of such resources 
which will result from other provisions of 
the present Treaty, to make complete repar- 
ation for all such loss and damage 

The Allied and Associated Governments, JJjJJJjgJJ, 
however, require, and Germany undertakes, ow language 

127 



Reimburse- 
ment to Bel- 
gium for her 
war coats. 



JRcparatio): Clauses 

that she will make compensation for all ^snef 
damage done to the civilian population of SjSJiS, 
the Allied and Associated Powers and to Schwas 
their property during the period of the omuiy.' 
belligerency of each as an Allied or Asso- 
ciated Power against Germany by such ag- 
gression by land, by sea and from the air, 
and in general all damage as defined in An- 
nex I hereto. 



In accordance with Germany's pledges, 
already given, as to complete restoration 
for Belgium, Germany undertakes, in addi- 
tion to the compensation for damage else- 
where in this Part provided for, as a conse- 
quence of the violation of the Treaty of 
1839, to make reimbursements of all sums 
which Belgium has borrowed from the Al- 
lied and Associated Governments up to No- 
vember 11, 191S, together with interest at 
the rate of five per cent. (5% ) per annum 
on such sums. This amount shall be de- 
termined by the Reparation Commission, 
and the German Government undertakes 
thereupon forthwith to make a special issue 
of bearer bonds to an equivalent amount 
payable in marks gold, on May 1, 192G, or, 
at the option of the German Government, 
on the 1st of May in any year up to 1926. 
Subject to the foregoing, the form of such 
bonds shall be determined by the Repara- 
tion Commission. Such bonds shall be 
handed over to the Reparation Commission, 



This special 
position for 
Belgium is 
derived from 
Germany's 
own admis- 
sions as to 
her liability 
on account of 
tli<' violation 
ot Belgian 
neutrality. 



128 



Reparation Clause* 

which has authority to take and acknowl- 
edge receipt thereof on behalf of Belgium. 



Ti.a Article 233. 

Reparation 
Commission, 
its powers 

and duties. Tlie amount of the above damage for 

which compensation is to be made by Ger- 
many shall be determined by an Inter-Al- 
lied Commission, to be called the Repara- 
tion Commission and constituted in the 
form and with the powers set forth here- 
under and in Annexes II to VII inclusive 
hereto. 

This Commission shall consider the 
claims and give to the German Government 
a just opportunity to be heard. 

The findings of the Commission as to the 
amount of damage defined as above shall be* 
concluded and notified to the German Gov 
eminent on or before May 1, 1021, as rep 
resenting the extent of that Government's 
obligations. 

The Commission shall concurrentlv draw 
up a schedule of payments prescribing the 
time and manner for securing and discharg- 
ing the entire, obligation within a period 
of thirty years from May 1, 1021. If, how- 
ever, within the period mentioned Ger- 
many fails to discharge her obligations, 
any balance remaining unpaid may within 
the discretion of the Commission, be post- 
poned for settlement in subsequent years, 

120 



5 S 

otherwise in s 
as \ Iss I G ra- 

the V 

iii this Part of 

. - ... I . 












A:. 



i 



ss as] 
L, L921, from time to time, cons the 
• - - and capacity of Germany, and, 
af ter g i _ her i sentath es a just i 

nuiiry to be hoard, shall have discretion 
to extend the date, and to modify the form 
payments, - i h as are to be provided for 
in . Lance with Article 233; bur not 
part, except with the spe< 
anl &s< reral G ents repre- 

sented upon the C ss on. 

Article 2 



- 



In order to enable the Allied and Asso- 
rted Powers to proceed at once to the 
restoration of their industrial and economic 
life, pending the full determination of their 
claims, Germany shall pay in such instal- 
ments and in such manner (whether in gold, 
commodities, ships, securities or otherwise) 
the Reparation Commission may ti\. 
during L919, 1920 and the qui months 

of L921, the equivalent of 20,000,000,000 

130 



Reparation Clause* 



Reparation 
iii kind. 



* 



ion 
i to 



10 



gold marks. Out of iliis sum the expense* jJ^Sfi 
of the armies of occupation subsequent to gSJJiJJS^ 
the Armistice of November 11, 1918, shall EBftftha 
firs! be met, and siicl) supplies of food and !2Ki°food 
raw materials as may be judged by the Gov- mate 
emments Of the Principal Allied and Asso- 
ciated rowers to be essentia] to enable Ger- 
many to meet her obligations for reparation 
may also, with the approval of the said 
Governments, be paid for out of the above 

sum. The balance sliall be reckoned to- 
wards liquidation of the amounts due for 
reparation. Germany shall further deposit 
bonds as prescribed In paragraph 12 (c) 
of Annex IT hereto. 



Article 236. 



Germany further agrees lo the direct ap- Thesedeiiv- 

' . erics in kind 

plica! ion of her economic resources to rep- am* wrist 

■gainst tli'' 

aration as specified in Annexes III, IV, V, initial and 

* 7 7/ BUnscqucnt 

and VI, relating respectively to merchant g*JJ5SJ|J , te 
shipping, to physical restoration, to coal above - 
and derivatives of coal, and to dyestuffs and 
olher chemical products; provided always 
that the value of the property transferred 
and any services rendered by her under 
these Annexes, assessed in the manner 
i herein prescribed, sliall be credited to her 
Inwards liquidation of her obligations un- 
der the above Articles. 

i::i 



Reparation Clauses 
Article 237. 



Division of 
reparation 
among the 
damaged 

nations. 



The successive instalments, including the 
above sum, paid over by Germany in satis- 
faction of the above claims will be divided 
by the Allied and Associated Governments 
in proportions which have been determined 
upon by them in advance on a basis of gen- 
eral equity and of the rights of each. 

For the purposes of this division the 
value of property transferred and services tfiatnatioM 

■^ * • receit mg 

rendered under Article 243, and under An- ^nTS 1 " 

nexes III, IV, V, VI, and VII, shall be ESSZ^ 

reckoned in the same manner as cash pay- RepaStfo? 

nients effected in that year. tunJ ' 



Thia 
operates so 



Restitution 
of stolen 
articles. 



Article 238. 

In addition to the payments mentioned 
above Germany shall effect, in accordance 
with the procedure laid down by the Repar- 
ation Commission, restitution in cash of 
cash taken away, seized or sequestrated, 
and also restitution of animals, objects of 
every nature and securities taken away, 
seized or sequestrated, in the cases in which 
it proves possible to identify them in terri- 
tory belonging to Germany or her allies. 

Until this procedure is laid down, resti- 
tution will continue in accordance with the 
provisions of the Armistice of November 
11, 1918, and its renewals and the Protocols 
thereto. 



.32 



Reparation Clauses 
Article 239. 

The German Government undertakes to 
make forthwith the restitution contem- 
plated toy Article 238 and to make the pay- 
ments and deliveries contemplated by Ar- 
ticles 233, 234, 235 and 236. 

Article 240. 
Faciiitosto The German Government recognizes the 

be accorded 

«on R oSSS'iB- Commission provided for by Article 233 as 
•ion. ^g same mav fo e constituted by the Allied 

and Associated Governments in accordance 
with Annex II, and agrees irrevocably to 
the possession and exercise by such Com- 
mission of the power and authority given to 
it under the present Treaty. 

The German Government will supply to 
the Commission all the information which 
the Commission may require relative to the 
financial situation and operations and to 
the property, productive capacity, and 
stock and current production of raw ma- 
terials and manufactured articles of Ger- 
many and her nationals, and further any 
information relative to military operations 
which in the judgment of the Commission 
may be necessary for the assessment of Ger- 
many's liability for reparation as defined in 
Annex I. 

The German Government will accord to 
the members of the Commission and its au- 

133 



Rt ion CUm& s 

thorised agents the same rights and im- 

munities as . -.-many by duly 

. d diploma: gents of friendly 
Powers, 

Germany further agrees to y for 

salsu - and cv ses of the Commiss 
and of such s - .: may employ. 

Article 241, 

Germany undertakes to pass, issue aud 
maintain iu force any legislation, orders 
and de< i - may be ssary to give 

aplet<. - provis 

A 

The pre - :" this of the present 

Treaty do not apply to the property, rights 
and interests referred toinS . ens 111 and 
IV of Van X i V Clauses) of the 

present Treaty, nor to the product of their 
liquidation, es far as concerns any 

final balance in favour ol many under 
Article 243 (a). 

Article _ i 

The following shall be reckoned as credits * 
i 
faw. t» Germany in respect of her reparation ■ ™ x 

obligations : :uv 

rsta very 

(a) Any final balance in favour of Ger- 
many under Section V I Alsace-Lorraine) of 
Part III (Political Clauses for Europe- 

134 



Reparation Clauses 

and Sections III and IV of Tart X (Eco- 
nomic Clauses) of the present Treaty; 

(b) Amounts due to Germany in respect 
of transfers under Section IV (Saar Basin) 
of Tart IT I (Political Clauses for Europe), 
Tart IX (Financial Clauses), and Part XII 
(Ports, Waterways and Railways) ; 

(c) Amounts which in the judgment of 
the Reparation Commission should be cred- 
ited to Germany on account of any other 
transfers under the present Treaty of prop- 
erly, rights, concessions or other interests. 

In no case however shall credit be given 
for properly restored in accordance with 
Article 238 of the present Part. 

Article 244. 



Cession of 

cables. 



The transfer of the German submarine 
cables which do not form the subject of par- 
ticular provisions of the present Treaty is 
regulated by Annex VII hereto. 



ANNEX I. 



The cate- 
gories of 
damage 
for which 
Germany 
li liable. 



Compensation may be claimed from Ger- nbam* 

r * tutes the. 

many under Article 232 above in respect of agreed inter- 

* r pretation of 

the total damage under the following cate- *»»epre- 

o o armistice 

rrnrinc • declaration. 

^ OIRJ> - (See Article 

232). 

(1) Damage to injured persons and to 
surviving dependents by personal injury to 

135 



Reparation Claut 

or death of civilians caused by acts of war. 
including bombardments or other attacks 
on land, on sea. or from the air. and all the 
direct consequences thereof, and of all oper- 
ations of war by the two groups of belliger- 
ents wherever arising. 

(2) Damage caused by Germany or her 
allies to civilian victims of acts of cruelty, 
violence or maltreatment (including in- 
juries to life or health as a consequence of 

imprisonment, deportation, internment or 
evacuation, of exposure at sea or of being 
forced to labour), wherever arising, and to 
the surviving dependents of such victims. 

(3) Damage caused bv Germany or her 
allies in their own territory or in occupied 
or invaded territory to civilian victims of 
all acts injurious to health or capacity to 

work, or to honour, as well as to the surviv- 
ing dependents of such victims. 

(4) Damage caused' by any kind of mal- 
treatment of prisoners of war. 

(5) As damage caused to the people of 
the Allied and Associated Powers, all pen- 
sions and compensation in the nature of 
pensions to naval and military victims of 
war (including members of the air force), 
whether mutilated, wounded, sick or in- 
valided, and to the dependents of such vic- 
tims, the amount due to the Allied and As- 
sociated Governments being calculated for 

136 



Reparation Clauses 

each of them as being the capitalised cost 
of such pensions and compensation at the 
date of the coming into force of the present 
Treaty on the basis of the scales in force in 
France at such date. 

i, 6 ) The cost of assistance by the Govern- 
ment s of the Allied and Associated Powers 
to prisoners of war and to their families 
and dependents. 

(7) Allowances by the Governments of 
the Allied and Associated Powers to the 
families and dependents of mobilised per- 
sons or persons serving with, the forces, the 
amount due to them for each calendar year 
in which hostilities occurred being calcu- 
lated for each Government on the basis of 
the average scale for such, payments in force 
in France during that vear. 

(S) Damage caused to civilians by being 
forced by Germany or her allies to labour 
without just remuneration. 

(9) Damage in respect of all property 
wherever situated belonging to any of the 
Allied or Associated States or their na- 
tionals, with the exception of naval and 
military works or materials, which has been 
carried off, seized, injured or destroyed by 
the acts of Germany or her allies on land, 
on sea or from the air. or damage directly 
in consequence of hostilities or of any oper- 
ations of war. 

10— 
01 



Reparation Clauses 

(10) Damage in tlie form of levies, fines 
and other similar exactions imposed by 
Germany or her allies upon the civilian 
population. 



AXXEX II. 



The 

Reparation 

Commission. 



1. 

The Commission referred to in Article 
233 shall he called ''The Reparation Com- 
mission" and is hereinafter referred to as 
''the Commission." 



Ita member- 
ship. 



2. 

Delegates to this Commission shall be 
nominated by the United States of America, 
Great Britain, France, Italy, Japan, Bel- 
gium and the Serb-Croat-Slovene State. 
Each of these Powers will appoint one Dele- 
gate and also one Assistant Delegate, who 
will take his place in case of illness or neces- 
sary absence, but at other times will only 
have the right to be present at proceedings 
without taking any part therein. 

On no occasion shall the Delegates of 
more than five of the above Towers have the 
right to take part in the proceedings of the 
Commission and to record their votes. The 
Delegates of the United States, Great Brit- 
ain, France and Italy shall have this right 
on all occasions. The Delegate of Belgium 

138 



Right of 
withdrawal. 



Participation 
of other 
interested 
states. 



Reparation Clauses 

shall have this right on all occasions other 
than those referred to below. The Dele- 
gate of Japan shall have this right on oc- 
casions when questions relating to damage 
at sea, and questions arising under Article 
200 of Tart IX (Financial Clauses) in 
Avhich Japanese interests are concerned, are 
under consideration. The Delegate of the 
Serb-Croat-Slovene State shall have this 
right when questions relating to Austria, 
Hungary or Bulgaria are under considera- 
tion. 

Each Government represented on the 
Commission shall have the right to with- 
draw therefrom upon twelve months' 1 notice 
filed with the Commission and confirmed in 
the course of the sixth month after the date 
of the original notice. 

3. 

Such, of the other Allied and Associated 
Powers as may be interested shall have the 
right to appoint a Delegate to be present 
and act as Assessor only while their respec- 
tive claims and interests are under exami- 
nation or discussion, but without the right 
to vote. 



In case of the death, resignation or recall 
of any Delegate, Assistant Delegate or As- 
sessor, a successor to him shall be nomi- 
nated as soon as possible. 

139 



Reparation Clauses 
6. 

The Commission will have its principal 
permanent Bureau in Paris and will hold 
its first meeting in Paris as soon as practi- 
cable after the coming into force of the pres- 
ent Treaty, and thereafter will meet in such 
place or places and at such time as it may 
deem convenient and as may be necessary 
for the most expeditious discharge of its 
duties. 

6. 

At its first meeting the Commission shall 
elect, from among the Delegates referred to 
above, a Chairman and a Vice-Chairman, 
who shall hold office for one year and shall 
be eligible for re-election. If a vacancy in 
the Chairmanship or Vice-Chairmanship 
should occur during the annual period, the 
Commission shall proceed to a new election 
for the remainder of the said period. 

7. 

The Commission is authorized to appoint 
all necessary officers, agents and employees 
who may be required for the execution of 
its functions, and to fix their remuneration; 
to constitute committees, whose members 
need not necessarily be members of the Com- 
mission, and to take all executive steps nec- 
essary for the purpose of discharging its 

140 



Germany's 

ri^ht, to be 
heard. 



Frocedure. 



Reparation Clauses 

duties ; and to delegate authority and discre- 
tion to officers, agents and committees. 

8. 

All proceedings of the Commission shall 
be private, unless, on particular occasions, 
the Commission shall otherwise determine 
for special reasons. 

9. 

The Commission shall be required, if the 
German Government so desire, to hear, 
within a period which it will fix from time 
to time, evidence and arguments on the part 
of Germany on any question connected with 
her capacity to pay. 

10. 

The Commission shall consider the claims 
and give to the German Government a just 
opportunity to be heard, but not to take any 
part whatever in the decisions of the Com- 
mission. The Commission shall afford a 
similar opportunity to the allies of Ger- 
many, when it shall consider that their in- 
terests are in question. 

11. 

The Commission shall not be hound by 
any particular code or rules of law or by any 
particular rule of evidence or of procedure, 

141 



The Commis- 
sion as agent 
of the Allied 
and Associ- 
ated Powers 
and its broad 
authority. 



Reparation Clauses 

but shall be guided by justice, equity and 
good faith. Its decisions must follow the 
same principles and rules in all cases where 
they are applicable. It will establish, rules 
relating to methods of proof of claims. It 
may act on any trustworthy modes of com- 
putation. 

12. 

The Commission shall have all the powers 
conferred upon it, and shall exercise all the 
functions assigned to it, by the present 
Treaty. 

The Commission shall in general have 
wide latitude as to its control and handling 
of the whole reparation problem as dealt 
with in this Part of the present Treaty and 
shall have authority to interpret its provi- 
sions. Subject to the provisions of the pres- 
ent Treaty, the Commission is constituted 
by the several Allied and Associated Gov- 
ernments referred to in paragraphs 2 and 3 
above as the exclusive agency of the said 
Governments respectively for receiving, sell- 
ing, holding, and distributing the reparation 
payments to be made by Germany under 
this Part of the present Treaty. The Com- 
mission must comply with the following con- 
ditions and provisions: 



These pro- 
visions and 
the unusual 
authority 
they confer 
are designed 
to make the 
reparation 
clauses and 
the Repara- 
tion Commis- 
sion workable 
and business- 
like In 
character. 



instructions (a) Whatever part of the full amount of 

to the v * 

commission. the proved claims is not paid in gold, or in 



142 



Reparation Clauses 

ships, securities and commodities or other- 
wise, Germany shall be required, under such 
conditions as the Commission may deter- 
mine, to cover by way of guarantee by an 
equivalent issue of bonds, obligations or 
otherwise, in order to constitute an ac- 
knowledgment of the said part of the debt. 

(b) In periodically estimating Germany's 
capacity to pay, the Commission •shall ex- 
amine the German system of taxation, first, 
to the end that the sums for reparation 
which Germany is required to pay shall be- 
come a charge upon all her revenues prior 
to that for the service or discharge of any 
domestic loan, and secondly, so as to satisfy 
itself that, in general, the German scheme 
of taxation is fully as heavy proportionate- 
ly as that of any of the Powers represented 
on the Commission. 

Bondiaaues. (c) In order to facilitate and continue These bonds 

cannot be 

the immediate restoration of the economic distributed or 

negotiated 

life of the Allied and Associated countries, without 

" unanimous 

the Commission will as provided in Article pa"a g n rapb (See 
235 take from Germany by way of security 13) 
for and acknowledgment of her debt a first 
instalment of gold bearer bonds free of all 
taxes and charges of every description estab- 
lished or to be established by the Govern- 
ment of the German Empire or of the Ger- 
man States, or by any authority subject to 
them; these bonds will be delivered on ac- 

143 



Reparation Chiu< - 

count and in three portions, the marks cold 
being parable in conformity with Article 
2 _ of Part IX (Finau Clauses) of the 
present Treaty as folk >: 

(1) To be issued forthwith, 20,000,000,* 
000 marks gold bearer bonds, payable not 
later than May 1. 10-1. without interest 
There shall be specially ap] towai 

amortisation of these bonds the payments 
which Germany is pledged to make in con- 
formity with Article 235, after deduction of 
the sums used for the reimbursement of ex- 
penses of the armies of occupation and for 
payment of foodstuffs and raw materials. 
Such bonds as have not been redeemed by 
May 1. 1021. shall then be exchanged or new 
bonds of the same type as those provided for 
below (paragraph 12, e. (2) ). 

(2) To be issued forthwith, further 10,- 
000.000.000 marks gold bearer bonds, bear- 
ing interest at l! 1 - per cent per annum be- 
tween 1921 and 1926, and thereafter at 5 
per cert, per annum with an additional 1 
per cent for amortisation beginning in 1926 
ou the whole amount of the issue. 

(3) To be delivered forthwith a covering 
undertaking in writing to issue when, but 
not until, the Commission is satisfied that 
Germany can meet such interest and sink- 
ing fund obligations, a further instalment 
of 40,000,000,000 marks gold 5 per cent. 

141 



Reparation Clauses 

bearer bonds, the time and mode of payment 
of principal and interest to be determined 
by the Commission. 

The dates for payment of interest, the 
manner of applying the amortisation fund, 
and all other questions relating to the issue, 
management and regulation of the bond 
issue shall be determined by the Commis- 
sion from time to time. 

Further issues by way of acknowledgment 
and security may be required as the Com- 
mission subsequently determines from time 
to time. 



Evaluation 
of damages 
to tha in- 
vaded areas. 



(d) In the event of bonds, obligations or 
oilier evidence of indebtedness issued by 
Germany by way of security for or acknowl- 
edgment of her reparation debt being dis- 
posed of outright, not by way of pledge, to 
persons oilier than the several Governments 
in whose favour Germany's original repara- 
tion indebtedness was created, an amount 
of such reparation indebtedness shall he 
deemed to be extinguished corresponding to 
the nominal value of the bonds, etc., so dis- 
posed of outright, and the obligation of Ger- 
many in respect of such bonds shall be con- 
fined to her liabilities to the holders of the 
bonds, as expressed upon their face. 



(e) The 



damage 



for repairing, recon- 



structing and rebuilding property in the in- 
vaded and devastated districts, including re- 



The principle 
of "replace- 
ment value" 
is here 
adopted. 



145 



Reparation Clauses 

installation of furniture, machinery and 
other equipment, will be calculated accord- 
ing to the cost at the dates when the work 
is done. 

(f) Decisions of the Commission relating 
to the total or partial cancellation of the 
capital or interest of any verified debt of 
Germany must be accompanied by a state- 
ment of its reasons. 

13. 

As to voting, the Commission will observe 
the following rules : 

When a decision of the Commission is 
taken, the votes of all the Delegates entitled 
to vote, or in the absence of any of them, 
of their Assistant Delegates, shall be re- 
corded. Abstention from voting is to be 
treated as a vote against the proposal under 
discussion. Assessors have no vote. 

On the following questions unanimity is 
necessary : 

(a) Questions involving the sovereignty 
of any of the Allied and Associated Powers, 
or the cancellation of the whole or any part 
of the debt or obligations of Germany; 

(b) Questions of determining the amount 
and conditions of bonds or other obligations 
to be issued by the German Government and 
of fixing the time and manner for selling, 
negotiating or distributing such bonds ; 

146 



Arbitration 
of certain 
differrncrg 
within the 
Commission. 



11 



Reparation Clauses 

(c) Any postponement, total or partial, 
beyond the end of 1930, of the payment of 
instalments falling dne between May 1, 1921, 
and the end of 1926 inclusive ; 

(d) Any postponement, total or partial, 
of any instalment falling dne after 1926 for 
a period exceeding three years; 

(e) Questions of applying in any partic- 
ular case a method of measuring damages 
different from that which has been previ- 
ously applied in a similar case; 

(f) Questions of the interpretation of 
the provisions of this Part of the present 
Treaty. 

All other questions shall be decided by 
the vote of a majority. 

In case of any difference of opinion 
among the Delegates, which cannot be 
solved by reference to their Governments, 
upon the question whether a given case is 
one which requires a unanimous vote for 
its decision or not, such difference shall be 
referred to the immediate arbitration of 
some impartial person to be agreed upon by 
their Governments, whose award the Allied 
and Associated Governments agree to ac- 
cept. 

14. 

Decisions of the Commission, in accord- pc effect of 

this clause 

ance with the powers conferred upon it, is t° render 

147 



Reparation Clauses 
shall forthwith become binding and may be unnecessary 

° ^ submission 

put into immediate execution 
further proceedings. 



without of jgi££ 

ernments 
represented. 



Issue of 
Participation 
Certificates 
to interested 
Governments. 



15. 

The Commission will issue to each of the 
interested Powers, in such form as the Com- 
mission shall fix : 

( 1 ) A certificate stating that it holds for 
the account of the said Power bonds of the 
issues mentioned above, the said certificate, 
on the demand of the Power concerned, be- 
ing divisible in a number of parts not ex- 
ceeding five; 

(2) From time to time certificates stat- 
ing the goods delivered by Germany on ac- 
count of her reparation debt which it holds 
for the account of the said Power. 

The said certificates shall be registered, 
and upon notice to the Commission, may be 
transferred by endorsement. 

When bonds are issued for sale or negoti- 
ation, and when goods are delivered by the 
Commission, certificates to an equivalent 
value must be withdrawn. 



Tho number 
of certificates 
is restricted 
to avoid a 
possible 
tendency of 
Governments 
to negotiate 
tha Commis- 
sion's own 
certificates. 



Interest on 
the Debt. 



16. 

Interest shall be debited to Germany as 
from May 1, 1921, in respect of her debt as 
determined by the Commission, after allow- 
ing for sums already covered by cash pay- 

148 



Reparation Clauses 



Notification 
by Commis- 
sion in case 
of default. 



Remedies in 
event of 
voluntary 
default. 



nients or their equivalent, or by bonds is- 
sued to the Commission, or under Article 
243. The rate of interest shall be 5 per 
cent, unless the Commission shall deter- 
mine at some future time that circum- 
stances justify a variation of this rate. 

The Commission, in fixing on May 1, 
1921, the total amount of the debt of Ger- 
many, may take account of interest due on 
sums arising out of the reparation of ma- 
terial damage as from November 11, 1918, 
up to May 1, 1921. 

17. 

In case of default by Germany in the per- 
formance of any obligation under this Part 
of the present Treaty, the Commission will 
forthwith give notice of such default to each 
of the interested Powers and may make such 
recommendations as to the action to be 
taken in consequence of such default as it 
may think necessary. 

18. 

The measures w T hich the Allied and Asso- 
ciated Powers shall have the right to take, 
in case of voluntary default by Germany, 
and which Germany agrees not to regard as 
acts of war, may include economic and 
financial prohibitions and reprisals and in 
general such other measures as the respec- 
tive Governments may determine to be nec- 
essary in the circumstances. 



It is particu- 
larl}* to be 
noted that 
these re- 
prisals can 
be taken only 
in the event 
of a volun- 
tary default 
by Germany. 



149 



Payment may 
be accepted 
otherwise 
than In 
money or 
bonds. 



Reparation Clauses 
19. 

Payments required to be made in gold or 
its equivalent on account of the proved 
claims of the Allied and Associated Powers 
may at any time be accepted by the Com- 
mission in the form of chattels, properties, 
commodities, business, rights, concessions, 
within or without German territory, ships, 
bonds, shares or securities of any kind, or 
currencies of Germany or other States, the 
value of such substitutes for gold being fixed 
at a fair and just amount by the Commis- 
sion itself. 



This meets a 
suggestion 
made by 
German}' in 
her observa- 
tions on the 
conditions of 
peace. It is 
optional 
with Ger- 
many to 
tender pay- 
ment in this 
form under 
thia para- 
graph. 



20. 



Rights of 
Allies and 
Neutrals to 
be safe- 
guarded. 



The Commission, in fixing or accepting 
payment in specified properties or rights, 
shall have due regard for any legal or equi- 
table interests of the Allied and Associated 
Powers or of neutral Powers or of their na- 
tionals therein. 



Thia prevents 

reparation 

payments 

being made 
at tha ex- 
pense of 
Allies or 
Neutrals and 
out of what 
is really their 
property. 



21. 



"No member of the Commission shall be 
responsible, except to the Government ap- 
pointing him, for any action or omission 
as such member. No one of the Allied or 
Associated Governments assumes any re- 
sponsibility in respect of any other Gov- 
ernment. 



150 



Reparation Clauses 

22. 

Subject to the provisions of the present 
Treaty this Annex may be amended by the 
unanimous decision of the Governments 
represented from time to time upon the 
Commission. 



Dissolu(i"T 
of th<: ( oni- 
inission. 



When all the amounts due from Germany 
and her allies under the present Treaty or 
the decisions of the Commission have been 
discharged and all sums received, or their 
equivalents, shall have been distributed to 
the Powers interested, the Commission shall 
be dissolved. 



ANNEX III. 



Reparation 
in kind for 
.-hipping 
losses. 



1. 

Germany recognises the right of the Al- 
lied and Associated Powers to the replace- 
ment, ton for ton (gross tonnage) and class 
for class, of all merchant ships and fishing 
bouts lost or damaged owing to the war. 

Nevertheless, and in spite of the fact 
that the tonnage of German shipping at 
present in existence is much less than that 
lost by the Allied and Associated Powers in 
consequence of the German aggression, the 
right thus recognised will be enforced on 

151 



Reparation Clauses 

German ships and boats under the follow- 
ing conditions : 
ships ceded i<he German Government, on behalf of 

by Germany. " 

themselves and so as to bind all other per- 
sons interested, cede to the Allied and Asso- 
ciated Governments the property in all the 
German merchant ships which are of 1,600 
tons gross and upwards; in one-half, reck- 
oned in tonnage, of the ships which are be- 
tween 1,000 tons and 1,600 tons gross; in 
one-quarter, reckoned in tonnage, of the 
steam trawlers; and in one-quarter, reck- 
oned in tonnage, of the other fishing boats. 



The German Government will, within 
two months of the coming into force of the 
present Treaty, deliver to the Reparation 
Commission all the ships and boats men- 
tioned in paragraph 1. 

3. 

The ships and boats mentioned in para- 
graph 1 include all ships and boats which 
(a) fly, or may be entitled to fly, the Ger- 
man merchant flag; or (b) are owned by 
any German national, company or corpora- 
tion or by any company or corporation be- 
longing to a country other than an Allied 
or Associated country and under the control 
or direction of German nationals; or (c) 

152 



Reparation Clauses 

are now under construction (1) in Ger- 
many, (2) in other than Allied or Associ- 
ated countries for the account of any Ger- 
man national, company or corporation. 

4. 

For the purpose of providing documents 
of title for the ships and boats to be handed 
over as above mentioned; the German Gov- 
ernment will: 

(a) Deliver to the Reparation Commis- 
sion in respect of each vessel a bill of sale 
or other document of title evidencing the 
transfer to the Commission of the entire 
property in the vessel, free from all en- 
cumbrances, charges and liens of all kinds, 
as the Commission may require; 

(b) Take all measures that may be in- 
dicated by the Reparation Commission for 
ensuring that the ships themselves shall be 
placed at its disposal. 

5. 

As an additional part of reparation, Ger- 
many agrees to cause merchant ships to be 
built in German yards for the account of 
Allied and Associated Governments as fol- 
lows : 

(a) Within three months of the coming 
into force of the present Treaty, the Repara- 
tion Commission will notify to the German 

153 



Reparation Clauses 

Government the amount of tonnage to be 
laid down in German shipyards in each of 
the two years next succeeding the three 
months mentioned above. 

(b) Within two years of the coming into 
force of the present Treaty, the Reparation 
Commission will notify to the German Gov- 
ernment the amount of tonnage to be laid 
down in each of the three years following 
the two years mentioned above. 

(c) The amount of tonnage to be laid 
down in each year shall not exceed 200,000 
tons, gross tonnage. 

(d) The specifications of the ships to be 
built, the conditions under which they are 
to be •built and delivered, the price per ton 
at which they are to be accounted for by 
the Reparation Commission, and nil other 
questions relating to the accounting, order- 
ing, building and delivery of the ships, shall 
be determined by the Commission. 

G. 

Germany undertakes to restore in kind 
and in normal condition of upkeep to the 
Allied and Associated Powers, within two 
months of -the coining into force of the pres- 
ent Treaty, in accordance with procedure to 
be laid down by the Reparation Commis- 
sion, any boats and other movable appli- 
ances belonging to inland navigation which 

154 



Reparation Clauses 

since August 1, 1914, have by any means 
whatever come into her possession or into 
the possession of her nationals, and which 
can be identified. 

With a view to make good the loss in in- 
land navigation tonnage, from whatever 
cause arising, Avhich has been incurred dur- 
ing the Avar by the Allied and Associated 
Powers, and which cannot be made good by 
means of the restitution prescribed above, 
Germany agrees to cede to the Reparation 
Commission a portion of the German river 
fleet up to the amount of the loss mentioned 
above, provided that such cession shall not 
exceed 20 per cent, of the river fleet as it 
existed on November 11, 1918. 

The conditions of this cession shall be 
settled by the arbitrators referred to in Ar- 
ticle 339 of Part XII (Ports, Waterways 
and Railways) of the present Treaty, who 
are charged with the settlement of diffi- 
culties relating to the apportionment of 
river tonnage resulting from the new in- 
ternational regime applicable to certain 
river systems or from the territorial changes 
affecting those systems. 

7. 
Germany agrees to take any measures 
that may be indicated to her by the Repara- 
tion Commission for obtaining the full title 
to the property in all ships which have dur- 
ing the war been transferred, or are in proc- 

155 



purposes. 



Be partition Clauses 

ess of transfer, to neutral flags, without the 
consent of the Allied and Associated Gov- 
ernments. 



8. 

Germany -waives all claims of any de- ™ 9 i "°t r ' 
scription against the Allied and Associated S^fS^ 
Governments and their nationals in respect f3i"t' u ' :i 
of the detention, employment, loss or dam- SSlu^ 
age of any German ships or boats, excep- amb&eefor 
tion being made of payments due in respect repatriation 
of the employment of ships in conformity 
"with the Armistice Agreement of January 
13, 1919, and subsequent Agreements. 

The handing over of the ships of the Ger- 
man mercantile marine must be continued 
without interrupt ion in accordance with 
the said Agreement. 



9. 

Germany waives all claims to vessels or 
cargoes sunk by or in consequence of naval 
action and subsequently salved, in which 
any of the Allied or Associated Govern- 
ments or their nationals may have any in- 
terest either as owners, charterers, insurers 
or otherwise, notwithstanding any decree of 
condemnation which may have been made 
by a Prize Court of Germany or of her 
allies. 

15G 



Reparation Clauses 
ANNEX IV. 

1. 

taktadfw TIie Allied and Associated Powers re- 

a?eas. evastated quire, and Germany undertakes, that in 
part satisfaction of her obligations ex- 
pressed in the present Part she will, slz here- 
inafter provided, devote her economic re- 
sources directly to the physical restoration 
of the invaded areas of the Allied and As- 
sociated Powers, to the extent that these 
Powers may determine. 

2. 

The Allied and Associated Governments 
may file with the Reparation Commission 
lists showing: 

berepfa^d. ( a ) Animals, machinery, equipment, 
tools and like articles of a commercial char- 
acter, which have been seized, consumed or 
destroyed by Germany or destroyed in direct 
consequence of military operations, and 
which such Governments for the purpose of 
meeting immediate and urgent needs, desire 
to have replaced by animals and articles of 
the same nature which are in being in Ger- 
man territory at the date of the coming into 
force of the present Treaty; 

(b) Reconstruction materials (stones, 
bricks, refractory bricks, tiles, wood, win- 

157 



Reparation Clausi s 

dow-glass, steel, lime, cement, etc.), ma- 
chinery, boating apparatus, furniture and 

like articles of a commercial character 
which the said Governments desire to have 
produced and manufactured in Germany 
and delivered to them to permit of the resto- 
ration of the invaded areas. 



Lists to be 
filed with the 
on. 



3. 

The lists relating to the articles men- 
tioned in 2 (a) above shall be tiled within 
sixty days after the date of the coining into 
force of the present Treaty. 

The lists relating to the articles in 2 (b) 
above shall be filed on or before December 
31, 1019. 

The lists shall contain all such details as 
are customary in commercial contracts 
dealing with the subject matter, including 
specifications, dates of delivery (but not ex- 
tending over more than four years), and 
places of delivery, hut not price or value, 
which shall be fixed as hereinafter provided 
by the Commission. 






Action on 
lists by the 
Commission. 



Immediately upon the filing of such lists 
with the Commission, the Commission shall 
consider the amount and number of the ma- 
terials and animals mentioned in the lists 
provided for above which are to be required 

158 



The Ootninis- 
mnd 
to t;ike into 
account the 
maintenance 
of Germany's 
economic life 
and to give 
Germany an 
opportunity 
lo be heard. 



tiepara I ion Clauses 

of Germany. In reaching a decision on this 
mailer the Commission shall take into ac- 
count such domestic requirements of Ger- 
many as it deems essential for the mainte- 
nance of Germany's social and economic life, 
the prices and dates at which similar arti- 
cles can be obtained in the Allied and Asso- 
ciated countries as compared with those to 
be fixed for German articles, and the general 
interest of the Allied and Associated Gov- 
ernments that the industrial life of Germany 
be not so disorganised as to affect adversely 
the ability of Germany to perform the other 
acts of reparation stipulated for. 

Machinery, equipment, tools and like ar- 
ticles of a commercial character in actual 
industrial use are not, however, to be de- 
manded of Germany unless there is no free 
stock of such articles respectively which is 
not in use and is available 1 , and then not in 
excess of 30 per cent, of the quantity of 
such articles in use in any one establishment 
or undertaking. 

The Commission shall give representa- 
tives of the German Government an oppor- 
tunity and a time to be heard as to their ca- 
pacity to furnish the said materials, arti- 
cles and animals. 

The decision of the Commission shall 
thereupon and at the earliest possible mo- 
ment be communicated to the German Gov- 

159 



Reparation Clau> 5 

eminent and to the several Interested Allied 
and Associated Gk 

The German Government undertakes to 
deliver the materials, articles and animals 
as specified in the said communication, and 
the interested Allied and Associated Gov- 
ernments severally agree to accept the same, 
provided they conform to the specification 
r are not. in the judgment of the 
Commission, unfit to he utilised in the work 

reparation. 

Mr 

o. 

The Commission shall determine the value 
to he attributed to the materials, articles 
and animals to he delivered in accordance 
with the foregoing, and the Allied or Asso- 
ciated Power receiving the same agrees t^ 
he charged with such value, and the amount 
thereof shall he treated as a payment by 
Germany to he divided in accordance with 
Article 237 of this Part of the present 
Treaty. 

In eases where the right to require physi- 
cal restoration as above provided is exer- 
cised, the Commission shall ensure that the 
amount to be credited against the repara- 
tion obligation of Germany shall be the fair 
value of work done or materials supplied by 
Germany, and that the claim made by the 
interested Power in respect of the damage 
so repaired by physical restoration shall be 

160 



deliveries of 
animals 



Reparation Clauses 

discharged to the extent of the proportion 
which the damage thus repaired bears to the 
whole of the damage thus claimed for. 

6. 

• 

V/.l''''.' r ',':'i"f As an immediate advance on account of 
the animals referred to in paragraph 2 (a) 
above, Germany undertakes to deliver in 
equal monthly instalments in the three 
months following the coming into force of 
the present Treaty the following quantities 
of live slock: 

(1) To the French Government. 

500 stallions (3 to 7 years) ; 
30,000 fillies and mares (18 months to 
7 years), type: Ardennais, 
Bonlonnais or Belgian; 
2,000 bulls (18 months to 3 years) ; 
90,000 milch cows (2 to 6 years) ; 
1,000 rams; 
100,000 sheep; 
10.000 goats. 

(2) To the Belgian Government 

200 stallions (3 to 7 years), large 
Belgian type; 

5,000 mares (3 to 7 years), large Bel- 
gian type; 

5,000 fillies (18 months to 3 years), 
large Belgian type; 

161 



Reparation Clauses 

2.000 bulls (18 months to 3 years) ; 

50,000 milch cows (2 to 6 years); 

40,000 heifers; 

200 rams; 

20,000 sheep; 

15.000 sows. 

The animals delivered shall bo of average 

health and condition. 

To the extent that animals so delivered 
cannot be identified as animals taken awa.\ 
or seized, the value of such animals shall be 
credited against the reparation obligations 
of Germany in accordance with paragraph 
5 of this Annex. 

7. 

Without waiting for the decisions of the 
Commission referred to in paragraph t of 
this Annex to be taken. Germany must con- 
tinue the delivery to France of the agricul- 
tural material referred to in Article III of 
the renewal dated January 16, 1919, of the 
Armistice. 

AXXEX V. 



Reparation German v accords the following options 

in the form " 

ot coai and for the deliverv of coal and derivatives of 

coal products. 

coal to the undermentioned signatories of 
the present Treaty. 

162 



'or France. 



Reparation Clauses 
2. 

Germany undertakes to deliver to France The second 

17 provision of 

seven million tons of coal per year for ten *y£*J . 
years. In addition, Germany undertakes replacement 10 
to deliver to France annually for a period SSSSoJS" 

, . , c i coal mines, 

not exceeding ten years an amount ot coal haaapri- 

. , , oritv. (See 

equal to the difference between the annual Paragraph 100 

production before the war of the coal mines 

of the Nord and Fas de Calais, destroyed as 

a result of the war, and the production of 

the mines of the same area during the years 

in question : such delivery not to exceed 

twenty million tons in any one year of the 

first five years, and eight million tons in any 

one year of the succeeding five years. 

It is understood that due diligence will 
be exercised in the restoration of the de- 
stroyed mines in the Nord and the Pas de 
Calais. 



3. 



ror Belgium. Germany undertakes to deliver to Belgium 
eight million tons of coal annually for ten 
years. 



4. 



For Italy. 



12 



Germany undertakes to deliver to Italy 
up to the following quantities of coal: 

163 



Reparation Glauses 



July 1019 to June 1920.. 


4 1 o million tons, 


— 1920 — 


1921.. 


6 — 


— 1921 — 


1022.. 


T 1 j — 


— 192-2 — 


1023.. 


8 — 


— 1923 — 


1024.. 


8y 2 - 


and each of the following 




live rears .... 




81 -. — 



At least two-thirds of the actual deliveries 
to be land-borne. 

5. 

E^Lnburg. Germany further undertakes to deliver an- 
nually to Luxemburg, if directed by the 
Reparation Commission, a quantity of coal 
equal to the pre-war annual consumption of 
German coal in Luxemburg-. 

6. 

Price.*. TJie ppiceg tQ be pai( j fop coa j deliyered 

under these options shall be as follows; 

(a) For overland delivery, including de- 
livery by barge, the German pithead price to 
German nationals, plus the freight to 
French, Belgian, Italian or Luxemburg 
frontiers, provided that the pithead price 
does not exceed the pithead price of British. 
coal for export. In the case of Belgian 
bunker coal, the price shall not exceed the 
Dutch bunker price. 

Railroad and barge tariffs shall not be 
higher than the lowest {similar rates paid in 
Germany. 

164 



Coal 

products. 



Reparation Clauses 

(b) For sea delivery, the German export 
price f. o. b. German ports, or the British 
export price f. o. b. British ports, whichever 
may be lower. 

7. 

The Allied and. Associated Governments 
interested may demand the delivery, in place 
of coal, of metallurgical coke in the propor- 
tion of 3 tons of coke to 4 tons of coal. 

8. 

Germany undertakes to deliver to France, 
and to transport to the French frontier by 
rail or by water, the following products, 
during each of the three years following the 
coming into force of this Treaty : 

Benzol 35,000 tons. 

€oal tar 50,000 tons. 

Sulphate of ammonia. . 30,000 tons. 

All or pan of the coal tar may, at the op- 
tion of the French Government, be replaced 
by corresponding quantities of products of 
distillation, such as light oils, heavy oils, 
anthracene, naphthalene or pitch. 

9. 

The price paid for coke and for the ar- 
ticles referred to in the preceding paragraph, 
shall be the same as the price paid by Ger- 

1G5 



Coke. 



Reparation Clause* 

man nationals under the same conditions 
of shipment to the French frontier or to the 
German ports, and shall be subject to any 
advantages which may be accorded similar 

products furnished to German nationals. 



Supervision 
.ind modifi- 
i .ition by 
Reparation 
t'onuuission. 



10. 

The foregoing options shall be exercised 
through the intervention of the Reparation 
Commission, which, subject to the specific 
provisions hereof, shall have power to de- 
termine all questions relative to procedure 
and the qualities and quantities of products, 
the quantity of coke which may be substi- 
tuted for coal, and the times and modes of 
delivery and payment. In giving notice to 
the German Government of the foregoing 
options the Commission shall give at least 
120 days' notice of deliveries to be made 
after January 1, 1020, and at least 30 days' 
notice of deliveries to be made between the 
coming into force of this Treaty and Janu- 
ary 1, 1920. Until Germany has received 
the demands referred to in this paragraph, 
the provisions of the Protocol of December 
25. 1018, (Execution of Article VI of the 
Armistice of November 11, 1918) remain 
in force. The notice to be given to the Ger- 
man Government of the exercise of the right 
of substitution accorded by paragraphs 7 
and 8 shall be such as the Reparation Com- 
mission may consider sufficient. If the 



Th<> Commis- 
sion is 
required to 
take into 
account the 
industrial 
reqiiirt'inents 
of Germany 
anj may 
modify 
the coal 
deliveries 
accordingly. 



166 



Repartition Clauses 

'Commission shall determine that the full 
exercise of the foregoing options would in- 
terfere unduly with the industrial require- 
ments of Germany, the Commission is au- 
thorised to postpone or to cancel deliveries, 
and in so doing to settle all questions of 
.priority; but the coal to replace coal from 
destroyed mines shall receive priority over 
other deliveries. 

ANNEX VI. 



Reparation Germany accords to the Reparation Com- 

in trio form « x 

ofdyostiiff mission an option to require as part of 

and eneinieiil x IX 

reparation the delivery by Germany of such 
quantities and kinds of dyestuffs and chem- 
ical drugs as the Commission may desig- 
nate, not exceeding 50 per cent, of the total 
stock of each and every kind of dyestuff 
and chemical drug in Germany or under 
German control at the date of the coming 
into force of the present Treaty. 

This option shall be exercised within sixty 
days of the receipt by the Commission of 
such particulars as to stocks as may be 
considered necessary by the Commission. 

2. 

Germany further accords to the Repara- 
tion Commission an option to require de- 

1G7 



deliverle 



Be pa rat ion Clause* 

liverv during the period from the date of 
the coming into force of the present Treaty 
until January 1, 1920, and during each 
period of six months thereafter until Jan- 
uary 1, 1925, of any spec! tied kind of dye- 
stuff and chemical drug up to an amount 
not exceeding 25 per cent, of the German 
production of such dyestuffs and chemical 
drugs during the previous six months pe- 
riod. If in any case the production during 
such previous six months was, in the opin- 
ion of the Commission, less than normal, 
the amount required may he 25 per cent, of 
the normal production. 

Such option shall be exercised within 
four weeks after the receipt of such particu- 
lars as to production and in such form as 
may he considered necessary by the Tom- 
mission; these particulars shall be fur- 
nished bv the German Government imme- 

« 

diately after the expiration of each, six 
months period. 



For dyestuffs and chemical drugs deliv- 
ered under paragraph 1, the price shall he 
fixed bv the Commission having regard to 
pre-war net export prices and to subsequent 
increases of cost. 

For dvestuffs and chemical drugs deliv- 
ered under paragraph 2. the price shall be 
fixed by the Commission having regard to 

IGS 



Reparation Clauses 

pre-war net export prices and subsequent 
variations of costs, or the lowest net selling 
price of similar dyestuffs and chemical 
drugs to any other purchaser. 

4. 

All details, including mode and times of 
exercising the options, and making delivery, 
and all other questions arising under this 
arrangement shall be determined by the Rep- 
aration Commission; the German Govern- 
ment will furnish to the Commission all 
necessary information and other assistance 
which it may require. 

5. 

The above expression "dyestuffs and 
chemical drugs" includes all synthetic dyes 
and drugs and intermediate or other prod- 
ucts used in connection with dyeing, so far 
as they are manufactured for sale. The 
present arrangement shall also apply to cin- 
chona bark and salts of quinine. 

ANNEX VII. 

cables ceded. Germany renounces on her own behalf 
and on behalf of her nationals in favour of 
the Principal Allied and Associated Powers 
all rights, titles or privileges of whatever 
nature in the submarine cables set out be- 
low, or in any portions thereof : 

1G9 



Reparation Clans 

Emden-Vigo : from the Straits of Dover 

to off Vigo; 
Emden-Brest: from off Cherbourg to 

Brest : 
Emden-Teneriffe : from off Dunkirk to 

off Teneriffe : 
Enulen-Azores (1) : from the Straits 

of Dover to Fayal : 
Enulen-Azores (2) : from the Straits 

of Dover to Fayal : 
Azores-New- York {!) : from Fayal to 

New York: 
Azores-New- York (2) : from Fayal to 

the longitude of Halifax; 
Teneriffe-Monrovia : from off Teneriffe 

to off Monrovia : 

Monrovia-Lome: 

. . .flat 2 o 30'N.; 

from about i .. .,.,,,. , n . . 

( long. :< 40 ^ . of Greenwich ; 

\ Fit/ :2°20'N.; 
to about. . . | long :5Q 3(y w Ql Greenwicll . 

and from Jlat ^^IS'X.; 
about I long. :0° 00' 

to Lome; 

Lome-Duala: from Lome to Duala; 

Monrovia-Fernambneo: from off Mon- 
rovia to off Pernambneo: 

Constantinople-Oonstanza : from Con- 
stantinople to Constanza; 

Yap-Shanghai, Yap-Guam, and Yap- 
Menado (Celebes) : from Yap Island 

170 



Reparation Clause* 

to Shanghai, from Yap Island to 
Guam Island, and from Yap Island 
to Menado. 

The value of the above mentioned cables 
or portions thereof in so far as they are 
privately owned, calculated on the basis of 
the original cost less a suitable allowance 
for depreciation, shall be credited to Ger- 
many in the reparation account. 

Section TT. 

SPECIAL PROVISIONS. 



Special 
articles to 

tt? restored. 



To France. 



Article 245. 

Within six months after the coming into 
force of the present Treaty the German Gov- 
ernment must restore to the French Govern- 
ment the trophies, archives, historical sou- 
venirs or works of art carried away from 
France by the German authorities in the 
course of the war of 1870-1871 and during 
this last war, in accordance with a list 
which will be communicated to it by the 
French Government; particularly the 
French fla^s taken in the course of the war 
of 1870-1871 and all the political papers 
taken by the German authorities on October 
10, 1S70, at the chateau of Oercay, near 
Brunoy (Seino-ot-Oise) belonging at the 
lime to Mr. Kuher, formerly Minister of 
State. 

171 



Reparation Clauses 



To the 
Hedjaz. 



To Great 
Britain. 



Article 246. 

Within six months from the coming into 
force of the present Treaty, Germany will 
restore to His Majesty the King of the Hed- 
jaz the original Koran of the Caliph Oth- 
man, which was removed from Medina by 
the Turkish authorities and is stated to 
have been presented to the ex-Emperor 
William II. 

Within the same period Germany will 
hand over to His Britannic Majesty's Gov- 
ernment the skull of the Sultan Mkwawa 
which was removed from the Protectorate 
of German East Africa and taken to Ger- 
many. 

The delivery of the articles above re- 
ferred to will be effected in such place and 
in such conditions as may be laid down by 
the Governments to which they are to be 
restored. 



Article 247. 



to Belgium. Germany undertakes to furnish to the 
University of Louvain, within three months 
after a request made by it and transmitted 
through the intervention of the Repara- 
tion Commission, manuscripts, incunabula, 
printed books, maps and objects of collec- 
tion corresponding in number and value to 
those destroyed in the burning by Germany 

172 



Reparation Clauses 

of the Library of Louvain. All details re- 
garding such replacement will he deter- 
mined by the Reparation Commission. 

Germany undertakes to deliver to Bel- 
gium, through the Reparation Commission, 
within six months of the coming into force 
of the present Treaty, in order to enable 
Belgium to reconstitute two great artistic 
works : 

( 1 ) The leaves of the triptych of the Mys- 
tic Lamb painted by the Van Eyck brothers, 
formerly in the Church of St. Bavon at 
Ghent, now in the Berlin Museum ; 

(2) The leaves of the triptych of the Last 
Supper, painted by Dierick Bouts, formerly 
in the Church of St. Peter at Louvain, two 
of which are now in the Berlin Museum 
and two in the Old Pinakotkek at Munich. 



Reparation 
and Treaty 
costa a first 
charge on 
German pub- 
lic assets. 



PART IX. 
FINANCIAL CLAUSES. 

Article 248. 

Subject to such exceptions as the Repara- 
tion Commission may approve, a first charge 
upon all the assets and revenues of the Ger- 
man Empire and its constituent States 
shall be the cost of reparation and all other 
costs arising under the present Treaty or 
any treaties or agreements supplementary 

173 



The Repara- 
tion Commis- 
sion may 
create excep- 
tions, and 
thus provide 
for Germany 
raising 
money for 
other than 
Treaty pur- 
poses. The 
charge does 
not extend 



Reparation Claw 

thereto or under arrangements concluded g 

between Germany and the Allied and Asso- {Y 

dated Powers during the Armistice or its ****** 

extensions. 

cental of jj p t0 j£ aj ^ 1921 q^ G ormau Govern- 

export of sold. * « 

ment shall not export or dispose of, and 
shall forbid the export or disposal of, gold 
without the previous approval of the Allied 
and Associated Powers acting through the 
Reparation Commission. 



Article l!49. 

costs of the There shall be paid by the German Gov- 

occup.v eminent the total cost of all armies of the 

Allied and Associated Governments in oc- 
cupied German territory from the date of 
the signature of the Armistice of November 
11, 1918, including the keep of men and 
beasts, lodging and billeting, .pay and al- 
lowances, salaries and wages, bedding, heat- 
ing, lighting, clothing, equipment, harness 
and saddlery, armament and rolling-stock, 
air services, treatment of sick and wounded, 
veterinary and remount services, transport 
service of all sorts (such as by rail, sea or 
river, motor lorries'!, communications and 
correspondence, and in general the cost of 
all administrative or technical services the 
working of which is necessary (or the train- 
ing of troops and for keeping their numbers 

174 



Reparation Clauses 

up to strength and preserving their military 
efficiency. 

The cost of such liabilities under the 
above heads so far as they relate to pur- 
chases or requisitions by the Allied and As- 
sociated Governments in the occupied terri- 
tories shall be paid by the German Govern- 
ment to the Allied and Associated Govern- 
ments in marks at the current or agreed 
rate of exchange. All other of the above 
costs shall be paid in gold marks. 

Article 250. 



Non-military 
property 
surrendered 
under the 
Armistice 
to be credited 
tu Uermany. 



Germany confirms (lie surrender of all 
material handed over to the Allied and As- 
sociated Powers in accordance with, the 
Armistice of November 11, 1918, and sub- 
sequent Armistice Agreements, and recog- 
nises the title of the Allied and Associated 
rowers to such material. 

There shall be credited to the German 
Government, against the sums due from it 
to the Allied and Associated Powers for 
reparation, the value, as assessed by the 
Reparation Commission, referred to in Ar- 
ticle 233 of Part VITT (Reparation) of the 
present Treaty, of the material handed over 
in accordance with Article VII of the Ar- 
mistice of November 11, 1918, or Article III 
of the Armistice Agreement of January 1G, 
1919, as well as of any other material 

175 



Reparation Clauses 

handed over in accordance with the Armis- 
tice of November 11, 1918, and of subse- 
quent Armistice Agreements, for which, as 
having non-military value, credit should 
in the judgment of the Reparation Com- 
mission be allowed to the German Govern- 
ment. 

Property belonging to the Allied and As- 
sociated Governments or their nationals re- 
stored or surrendered under the Armistice 
Agreements in specie shall not be credited 
to the German Government. 

Article 251. 

priority The priority of The charges established by 

jf Treaty l 

charges. Article 218 shall, subject to the qualifica- 
tions made below, be as follows : 

(a) The cost of the armies of occupation 
as defined under Article 219 during the Ar- 
mistice and its extensions ; 

(b) The cost of any armies of occupation 
as defined under Article 219 after the com- 
ing into force of the present Treaty; 

(<) The cost of reparation arising out of 
the present Treaty or any treaties or con- 
ventions supplementary thereto; 

(d) The cost of all other obligations in- 
cumbent on Germany under the Armistice 
Conventions or under this Treaty or any 

176 



May 1, 1021. 



Reparation Clauses 

treaties or conventions supplementary 
thereto. 

The payment for such supplies of food and provision for 

tit safeguarding 

raw material for Germany and such other Germany's 

" food and raw 

payments as may be judged by the Allied JgKSL*, 
and Associated Powers to be essential to ESSs? 
enable Germany to meet her obligations in SSrn?i u "' 
respect of reparation will have priority to 
the extent and upon the conditions which 
have been or may be determined by the Gov- 
ernments of the said Powers. 

Article 252. 

The right of each of the Allied and Asso- 
ciated Powers to dispose of enemy assets 
and property within its jurisdiction at the 
date of the coming into force of the present 
Treaty is not affected by the foregoing pro- 
visions. 

Article 253. 

Nothing in the foregoing provisions shall 
prejudice in any manner charges or mort- 
gages lawfully effected in favour of the 
Allied or Associated Powers or their na- 
tionals respectively, before the date at which 
a state of war existed between Germany and 
the Allied or Associated Power concerned, 
by the German Empire or its constituent 
States, or by German nationals, on assets in 
their ownership at that date. 

177 



Credit to 
German}' on 
account of 
pre-war debt 
attributable 
to ceded 
territory. 



Reparation Clauses 
Article 254. 

The Powers to which. German territory is 
ceded shall, subject to the qualifications 
made in Article 255, undertake to pay : 

(1) A portion of the debt of the German 

Empire as it stood on August 1, 
1914, calculated on the basis of 
the ratio between the average for 
the three financial years 1911, 19 L2, 
1913, of such revenues of the ceded 
territory, and the average for the 
same years of such revenues of the 
whole German Empire as in the 
judgment of the Reparation Com- 
mission are best calculated to rep- 
resent the relative ability of the re- 
spective territories to make pay- 
ment ; 

(2) A portion of the debt as it stood on 

August 1, 1914, of the German 
State to which the ceded territory 
belonged, to be determined in ac- 
cordance with the principle stated 
above. 

Such portions shall be determined by the 
Reparation Commission. 

The method of discharging the obligation, 
both in respect of capital and of interest, so 
assumed shall be fixed by the Reparation 
Commission. Such method may take the 



178 



Exception 
in the case 
of Alsace- 
Lorraine. 



Partial 
exception in 
the raso of 
Poland. 



Reparation Clauses 

form, inter alia, of the assumption by the 
Tower to which the territory is ceded of 
Germany's liability for the German debt 
held by her nationals. But in the event of 
the method adopted involving any payments 
to the German Government, such payments 
shall be transferred to the Reparation Com- 
mission on account of the sums due for repa- 
ration so long as any balance in respect of 
such sums remains unpaid. 

Article 255. 

• To* 9 exeep- 

(1) As an exception to the above provi- tion is based 

v ' l l on the like 

sion and inasmuch as in 1871 Germany re- action of 

^ Germany 

fused to undertake any portion of the bur- &»i87i. 
den of the French debt, France shall be, in 
respect of Alsace-Lorraine, exempt from any 
payment under Article 254. 

(2) In the case of Poland that portion of 
the debt which, in the opinion of the Repara- 
tion Commission, is attributable to the 
measures taken by the German and Prus- 
sian Governments for the German colonisa- 
tion of Poland shall be excluded from the 
apportionment to be made under Article 
254. 

(3) In the case of all ceded territories 
other than Alsace-Lorraine, that portion of 
the debt of the German Empire or German 
States which, in the opinion of the Repara- 



13 



179 



Reparation Clauses 

tion Commission, represents expenditure by 
the Governments of the German Empire or 
States upon the Government properties re- 
ferred to in Article 256 shall be excluded 
from the apportionment to be made under 
Article 2o± 

Article 25G. 



Credit to 
Germany 
for public 
property 
in ceded 
territory. 



Exception 
in the case 
of Alsace- 
Lorraine. 



Powers to -which German territory is ceded 
shall acquire all property and possessions 
situated therein belonging to the German 
Empire or to the German States, and the 
value of such acquisitions shall be fixed by 
the Reparation Commission, and paid by the 
State acquiring the territory to the Repara- 
tion Commission for the credit of the Ger- 
man Government on account of the sums 
due for reparation. 

For the purposes of this Article the prop- 
erty and possessions of the German Empire 
and States shall be deemed to include all 
the property of the Crown, the Empire or 
the States, and the private property of the 
former German Emperor and other Royal 
personages. 

In view of the terms on which Alsace-Lor- ™^, a * 
raine was ceded to Germany in 1S71, France uke 
shall be exempt in respect thereof from mak- 
ing any payment or credit under this Arti- 
cle for any property or possessions of the 
German Empire or States situated therein. 



in 1871. 



180 



Reparation Clauses 

Belgium also shall be exempt from mak- 
ing any payment or any credit under tbis 
Article for any property or possessions of 
the German Empire or States situated in 
German territory ceded to Belgium under 
the present Treaty. 

Article 257. 

? u P e ™ a " . In the case of the former German terri- 

debt allocated 

to bladmL tories, including colonies, protectorates or 
l s mandate? er dependencies, administered by a Mandatory 
under Article 22 of Part I (League of Na- 
tions) of the present Treaty, neither the 
territory nor the Mandatory Power shall be 
charged with any portion of the debt of the 
German Empire or States. 

All property and possessions belonging id 
the German Empire or to the German States 
situated in isuch territories shall be trans- 
ferred with the territories to the Manda- 
tory Power in its capacity as such and no 
payment shall be made nor any credit given 
to those Governments in consideration of 
this transfer. 

For the purposes of this Article the prop- 
erty and possessions of the German Empire 
and of the German States shall be deemed 
to include all the property of the Crown, 
the Empire or the States and the private 
property of the former German Emperor 
and other Royal personages. 

181 



Reparation Clauses 
Article 258. 



Waiver by 

Germany I 

rights in 
banks, et 
of her former 
allies and 
in Rus 



Financ-inl 
adjustment) 
with r< 
to Turkey, 
Austria- 
Hungary, 
Roumania 
and Russia. 



Germany lenounces all rights accorded to 
her or her nationals by treaties, conventions 
or agreements, of whatsoever kind, to repre- 
sentation upon or participation in the con- 
trol or administration of commissions, state 
banks, agencies or other financial or eco- 
nomic organizations of an international 
character, exercising powers of control or 
administration, and operating in any of the 
Allied or Associated States, or in Austria. 
Hungary, Bulgaria or Turkey, or in the de- 
pendencies o( these States, or in the former 
Russian Empire. 

Article 259, 

(1) Germany agrees to deliver within one 
month from the date of the coming into 
force of the present Treaty, to such author- 
ity as the Principal Allied ami Associated 
Powers may designate, the sum in gold 
which was to be deposited in the Reichsbank 
in the name of the Council of the Adminis- 
tration of the Ottoman Public Debt as se- 
curity for the first Issue o( Turkish Govern- 
ment currency notes. 

(2) Germany recognises her obligation to 
make annually for the period o\' twelve years 
the payments in gold for which provision 
is made in the German Treasury Bonds de- 

182 



Reparation Clauses 

posited by her from time to time in the name 
of the Council of the Administration of the 
Ottoman Public Debt as security for the sec- 
ond and subsequent issues of Turkish Gov- 
ernment currency notes. 

(3) Germany undertakes to deliver, with- 
in one month from the coming into force of 
the present Treaty, to such authority as the 
Principal Allied and Associated Powers 
may designate, the gold deposit constituted 
in the Reichsbank or elsewhere, represent- 
ing the residue of the advance in gold agreed 
to on May 5, 1915, by the Council of the Ad- 
ministration of the Ottoman Public Debt to 
the Imperial Ottoman Government. 

(4) Germany agrees to transfer to the 
Principal Allied and Associated Powers any 
title that she may have to the sum in gold 
and silver transmitted by her to the Turk- 
ish Ministry of Finance in November, 1918, 
in anticipation of the payment to be made 
in May, 1919, for the service of the Turkish 
Internal Loan. 

(5) Germany undertakes to transfer to 
the Principal Allied and Associated Pow- 
ers, within a period of one month from the 
coming into force of the present Treaty, 
any •sums in gold transferred as pledge or 
as collateral security to the German Govern- 
ment or its nationals in connection with 

1S3 



Reparation Clan- • 

loans made by them to the Austro-Hungar- 
ian Government. 

(6) Without prejudice to Article 292 of 
Tart X (Economic Clauses) of the present 
Treaty. Germany confirms the renunciation 

provided for in Article XV of the Armistice 
of November 11, 1918, of any benefit dis- 
closed by the Treaties of Bucharest and of 
Prest-Litovsk and by the treaties supple- 
mentary thereto. 

-many undertakes to transfer, either to 
Roumania or to the Principal Allied and 
Associated Powers as the case may be, all 
monetary instruments, specie, securities and 
negotiable instruments, or goods, -which she 
has received under the aforesaid Treaties. 

7 | The sums of money and all securi- 
ties, instruments and goods of whatsoever 
nature, to be delivered, paid and transferred 
under the provisions of this Article, shall be 
disposed of by the Principal Allied and As- 
sociated Powers in a manner hereafter to be 
determined by these Powers. 



Agreement 
by Genua • 
to cev'e r - 
in public 
util 

ss -■; 

Sta: 



Article 260. 

Without prejudice to the renunciation of 
any rights by Germany on behalf of herself 
or of her nationals in the other provisions 
of the present Treaty, the Reparation Com- 
mission may within one year from the com* 

1S4 



Reparation Clauses 

ing into force of the present Treaty demand 
thai the German Government become pos- 
sessed of any rights and interests of German 
nationals in any public utility undertaking 
or in auy concession operating in Russia, 
China, Turkey, Austria, Hungary and Bul- 
garia, or in the possessions or dependencies 
of these States or in any territory formerly 
belonging to Germany or her allies, to be 
ceded by Germany or her allies to any 
Power or to be administered by a Mandatory 
under the present Treaty, and may require 
that the German Government transfer, 
within six months of the date of demand, 
all such lights and interests and any simi- 
lar rights and interests the German Gov- 
ernment may itself possess to the Repara- 
tion Commission. 
rviv.ito Germany shall be responsible for in- 

owners wno v ■*■ 

; to , i''T,Xnm-' ! d < Miini lying her nationals so dispossessed, 
S,!™ 11 " and the Reparation Commission shall credit 
Germany, on account of sums due for rep- 
aration, with such sums in respect of the 
value of the transferred rights and interests 
as may be assessed by the Reparation Com- 
mission, and the German Government shall, 
within six: months from the coming into 
force of the present Treaty, communicate 
to the Reparation Commission all such 
rights and interests, whether already 
granted, contingent or not yet exercised, 
and shall renounce on behalf of itself and 

1S5 



s s 

- • -aals in Allied and As- 

sociated Powers all such rights and inter- 
ests which haw not boon so communicated. 



\ . 261. 



- 
or 

- 
- 



rmanj undertakes to transfei to the 
Allied and Associated Powers any clah a 

Diaj have to payment or repayment by 
the GoYernmen - Austria, Hungary, Bul- 
gai Tn: key. and. in particular, b 

claims which ma> arise, new or hereafter. 
m the fulfilment of undertakings made 
by Germany during the war to these Gov- 
ernments. 



A : 262. 



1 

-<-r 



Any monetary obligation due bv Ger- 

many arising out of the present Treaty and 
expressed in terms of gold marks shall be 
payable at the option of the creditors in 
pounds sterling payable in London; geld 
dollars of the United States of America pay- 
able in New York; geld francs payable in 
Paris: or gold lire payable in Kerne. 

For the purpose of this Article the geld 
veins mentioned above shall be defined as 
being of the weight and fineness o\' gold as 
enacted bv law on January 1. 101 I. 

IS6 



Reparation ( 'lauses 
Article 263. 

^ i "; i i: ; l , iii Germany gives a guarantee to the Bra- 
toBraiii. zilian Government that all sums represent- 
ing the gale of coffee belonging to the State 
of Sao Paolo in the ports of Hamburg, Brem- 
en, Antwerp and Trieste, which were de- 
posited with the Bank of BleichrOder at Ber- 
lin, shall be reimbursed together with inter- 
est al the rate or rates agreed upon. Ger- 
many having prevented the transfer of the 
sums in question to the State of Sao Paolo 
at the proper time, guarantees also that the 
reimbursement shall be effected at the rate 
of exchange of the day of the deposit. 



ECONOMIC CLAUSES 



Attached to the text of the Economic 
Clauses as here printed are marginal notes 
which were prepared by the American dele- 
gation to aid in the consideration of the 
Treaty in its draft form. The notes on the 
left summarize the contents of the several 
clauses; those on the right mention points 
of significance to the American negotiators. 
The notes are not in every detail the same 
as those that were attached to the draft 
Treaty, but in essentials they conform to 
the original, and they indicate in what way 
the American economic staff did its work. 



ECONOMIC CLAUSES. 
Section I. 

COMMERCIAL RELATIONS. 

Chapter I. 

customs regulations, duties and 
restrictions. 

Article 264. 



Equality of 

duties for 
all states. 



Equality and 
regulation of 
imports. 



Germany undertakes that goods the prod- JJ^}^,** 
uce or manufacture of any one of the Allied If™ ^« 83 
or Associated States imported into German flS aIS' 
territory, from whatsoever place arriving, 280) 
shall not be subjected to other or higher 
duties or charges (including internal 
charges ) than those to which the like goods 
the produce or manufacture of any other 
such State or of any other foreign country 
are subject. 

Germany will not maintain or impose any 
prohibition or restriction on the importa- 
tion into German territory of any goods the 
produce or manufacture of the territories 
of any one of the Allied or Associated 
States, from whatsoever place arriving, 

191 



Economic Clauses 

which shall not equally extend to the impor- 
tation of the like goods the produce or manu- 
facture of any other such State or of any 
other foreign country. 



Article 265. 



No discrim- 
ination by 
indirect 
methods. 



Germany further undertakes that, in the Jmn^five* 



matter of the regime applicable on impor- 
tation, no discrimination against the com- 
merce of any of the Allied and Associated 
States as compared with any other of the 
said States or any other foreign country 
shall be made, even by indirect means, such 
as customs regulations or procedure, meth- 
ods of verification or analysis conditions 
of payments of duties, tariff classification 
or interpretation, or the operation of mo- 
nopolies. 



years unless 

ie of 
Nations acta 
(Sea Article 
280.) 



Article 266. 



No discrim- 
ination .13 
da ex- 
ported goods. 



Nations acts. 
S e Article 
280.) 



In all that concerns exportation Germany to cease at 

1 * end of five 

undertakes that goods, natural products or years unless 

• * League of 

manufactured articles, exported from Ger- 
man territory to the territories of any one 
of the Allied or Associated States shall not 
be subjected to other or higher duties or 
charges (including internal charges) than 
those paid on the like goods exported to 
any other such State or to any other foreign 
country. 



192 



Economic Clauses 

Germany will not maintain or impose any 
prohibition or restriction on the exportation 
of any goods sent from her territory to any 
one of the Allied or Associated States which 
shall not equally extend to the exportation 
of the like goods, natural products or manu- 
factured articles, sent to any other such 
state or to any other foreign country. 



All favors to 
bo granted 
equally. 



Article 267. 

Every favour, immunity or privilege in 
regard to the importation, exportation or 
transit of goods granted by Germany to 
any Allied or Associated State or to any 
other foreign country whatever shall si- 
multaneously and unconditionally, without 
request and without compensation, be ex- 
tended to all the Allied and Associated 
States. 



To ceaso at 
end of five 
years unless 
Leaffue of 
Nations acta . 
(See Artielo 
2S0.) 



Article 268. 



Alsace- 
Lorraine 
products 
free into 
Germany 
for rive years. 



The provisions of Articles 264 to 267 in- 



Automat- 
ically enda 



elusive of this Chapter and of Article 323 *J£ r 8 five 
of Part XII (Ports, Waterways and Rail- 
ways) of the present Treaty are subject to 
the following exceptions: 

(a) For a period of five years from the 
coming into force of the present Treaty, 
natural or manufactured products which 
both originate in and come from the terri- 



193 



Economic Clauses 



Alsace tex- 
tiles to move 
freely for 
finishing 
operations. 



Polish prod- 
ucts free 
into Ger- 
many for 
three years. 



Automat- 
ical h' ends 



torics of Alsace and Lorraine reunited to 
France shall, on importation into German 
customs territory, be exempt from all cus- 
toms duty. 

The French Government shall fix each 
year, by decree communicated to the German 
Government, the nature and amount of the 
products which shall enjoy this exemption. 

The amount of each product which may be 
thus sent annually into Germany shall not 
exceed the average of the amounts sent an- 
nually in the years 1911-1913. 

Further, during- the period above men- 
tioned the German Government shall allow y^S. flTe 
the free export from Germany and the free 
re-importation into Germany, exempt from 
all customs duties and other charges (in- 
cluding internal charges), of yarns, tissues, 
and other textile materials or textile prod- 
ucts of any kind and in any condition, sent 
from Germany into the territories of Alsace 
or Lorraine, to be subjected there to any 
finishing process, such as bleaching, dye- 
ing, printing, mercerisation, gassing, twist- 
ing or dressing. 

(6) During a period of three years from A^J" a ^ 
the coming into force of the present Treaty *J£« t three 
natural or manufactured products which 
both originate in and come from Polish ter- 
ritories which before the war were part of 
Germany, shall, on importation into Ger- 

191 



Economic Clauses 

man customs territory, be exempt from all 
customs duty. 

The Polish Government shall fix each year, 
by decree communicated to the German Gov- 
ernment, the nature and amount of the 
products which shall enjoy this exemption. 

The amount of each product which may be 
thus sent annually into Germany shall not 
exceed the average of the amounts sent an- 
nually in the years 1911-1913. 

c"™n*ed. (c) The Allied and Associated Powers ^j^^ 
reserve the right to require Germany to ac- five years, 
cord freedom from customs duty, on impor- 
tation into German customs territory, to 
natural products and manufactured articles 
which both originate in and come from the. 
Grand Duchy of Luxemburg, for a period 
of five years from the coming into force of 
the present Treaty. 

The nature and amount of the products 
which, shall enjoy the benefits of this regime 
shall be communicated each year to the 
German Government. 

The amount of each product which may 
be thus sent annually into Germany shall 
not exceed the average of the amounts sent 
annually in the years 1911-1913. 

Article 269. 

man^uS"' During the first six months after the 
™*n\n force coming into force of the present Treaty, 

14 195 



Economic Clauses 

c°e r rtlin n oth!r S ' tlie duties imposed by Germany ou imports 
mahfun-"" from Allied and Associated States shall not 
thi a m e months be higher than the most favourable duties 



more. 



Reservations 
as to occu- 
pied regions. 



years. 



which were applied to imports into Ger- 
many on July 31, 1914. 

During a further period of thirty months f c c ° e °^ ion 
after the expiration of the first six months, o^SSiiy 
this provision shall continue to be applied fearVholm- 
exclusively with regard to products which, GermaiVof 

vensref ul 

being comprised in Section A of the First duties on 
Category of the German Customs Tariff of independent 

particularly on 

December 25, 1902, enjoyed at the above- the German 

* market. 

mentioned date (July 31, 1914) rates con- Automat- 

\ •' ' ically ends 

ventionalised by treaties with the Allied **• three 
and Associated Powers, with the addition 
of all kinds of wine and vegetable oils, of 
artificial silk and of washed or scoured 
wool, whether or not they were the subject 
of special conventions before July 31, 1911. 

Article 270. 

The Allied and Associated Powers re- 
serve the right to apply to German terri- 
tory occupied by their troops a special 
customs regime as regards imports and ex- 
ports, in the event of such a measure being 
necessary in their opinion in order to safe- 
guard the economic interests of the popula- 
tion of these territories. 



196 



Economic Clauses 



Chapter II. 



SHIPPING. 



Article 271. 



Most-favored- 
nation treat- 
ment for fish- 
ing and coast- 
ing vessels. 



As regards sea fishing, maritime coasting To eease at 

007 ° end of five 

trade, and maritime towage, vessels of the years unless 

' ° > League of 

Allied and Associated Powers shall enjoy, fa^tid!" 

in German territorial waters, the treatment 280) 
accorded to vessels of the most favoured 
nation. 

Article 272. 



Police of 
North Sea 
fisheries. 



Nations acts. 
(See Article 
280.) 



Germany agrees that, notwithstanding to cease at 

J ° ' ° end of five 

any stipulation to the contrary contained in {£*" JJ'JJ 88 
the Conventions relating to the North Sea 
fisheries and liquor traffic, all rights of in- 
spection and police shall, in the case of fish- 
ing-boats of the Allied Powers, be exercised 
solely by ships belonging to those Powers. 



Ship certifi- 
cates and 
documents. 



Article 273. 

In the case of vessels of the Allied or As- Permanent. 
sociated Powers, all classes of certificates 
or documents relating to the vessel, which 
were recognized as valid by Germany before 
the war, or which may hereafter be recog- 
nised as valid by the principal maritime 
States, shall be recognised by Germany as 

197 



Economic Clauses 



Regis: - 
ships of 
countries 
having no 
sea-coast. 



valid and as equivalent to the correspond- 
ing certificates issued to German vessels. 

A similar recognition shall be accorded Permanent 
to the certificates and documents issued to 
their vessels by the Governments of new 
States, whether they have a sea-coast or 
not, provided that such certificates and 
documents shall be issued in conformity 
with the general practice observed in the 
principal maritime States. 

The High Contra eting Parties agree to Permanent, 
recognise the flag flown by the vessels of an 
Allied or Associated Power having no sea- 
coast which are registered at some one spe- 
cified place situated in its territory ; such, 
place shall serve as the port of registry of 
such vessels. 



Chapter III. 



UNFAIR COMPETITION. 



Article 274. 



False wrap- 
pings and 
markings 
to bfl sup- 
pressed br 
German 
d\ eminent. 



Germany undertakes to adopt all the 
necessary legislative and administrative 
measures to protect goods the produce or 
manufacture of anv one of the Allied and 
Associated Powers from all forms of unfair 
competition in commercial transactions. 

Germany undertakes to prohibit and re- 
press by seizure and by other appropriate 



This is in 
accord with 
the Madrid 
Convention. 
The Allies 
do not here 
enter on any 
reciprocal 
engagement, 
but the im- 
portant 
Allied coun- 
tries already 
reciprocate. 



198 



Economic Clauses 

remedies the importation, exportation, man- 
ufacture, distribution, sale or offering for 
sale in its territory of all goods bearing 
upon themselves or their usual get-up or 
wrappings any marks, names, devices, or 
description whatsoever which are calculated 
to convey directly or indirectly a false in- 
dication of the origin, type, nature, or spe- 
cial characteristics of such goods. 



Germany 
to enforce 
regional ap- 
pellation of 
wines and 
spirits as set- 
tled by other 
states which 
act recipro- 
cally in these 
matters. 



Article 275. 

Germany undertakes on condition that '££££££ 
reciprocity is accorded in these matters to reciprocity. 
respect any law, or any administrative or 
judicial decision given in conformity with 
such law, in force in any Allied or Asso- 
ciated State and duly communicated to her 
by the proper authorities, defining or regu- 
lating the right to any regional appellation 
in respect of wine or spirits produced in the 
State to which the region belongs, or the 
conditions under which, the use of any such, 
appellation may be permitted; and the im- 
portation, exportation, manufacture, dis- 
tribution, sale or offering for sale of prod- 
ucts or articles bearing regional appel- 
lations inconsistent with such law or order 
shall be prohibited by the German Govern- 
ment and repressed by the measures pre- 
scribed in the preceding Article. 



199 



Economic Clauses 

Chapter IV. 

treatment of nationals of allied and 
associated powers. 

Article -70. 



National 
treatment 

as rec 



No indirect 
• .a. 



V - a' 

•nent 
as regards 

t-LXS?. 



Germany undertakes: 

(a) Not 10 subject the nationals of the 3^ 
Allied and Ass< ciated Powers to any pro- 
hibition m regard to the exercise ot occupa- 

, , . me-. 

tions, professions, trade and mdustrv. - 

SS0.J 

which shall not be equally applicable to all 
aliens without exception; 

(6) Not to subject the nationals of the 
Allied and Associated Powers in regard to 
the rights referred to in paragraph (a) to 
any regulation or restriction which might 
contravene directly or indirectly the stipu- 
lations of the said paragraph, or which shall 
be other or more disadvantageous than 
those which are applicable to nationals of 
the most favoured nation: 

(c) Not to subject the nationals of the 
Allied and Associated Powers, their prop- 
erty, lights or interests, including com- 
panies and associations in which they are 
interested, to any charge, tax or impost, 
direct or indirect, other or higher than those 
which are or may be imposed on her own 
nationals or their property, rights or in- 
terests : 

200 



Economic Clauses 



National 
treatment 

in general. 



(d) Not to subject the nationals of any 
one of the Allied and Associated Powers to 
any restriction which was not applicable 
on July 1, 1914, to the nationals of such 
Powers unless such restriction is likewise 
imposed on her own nationals. 



Article 277. 

Protection The nationals Of the Allied and AsSOCi- Permanent, 

under local 

laws generally, a ted Powers shall enjoy in German terri- 
tory a constant protection for their persons 
and for their property, rights and interests, 
and shall have free access to the courts of 
law. 



Article 278. 

Germany undertakes to recognise any Permanent. 
new nationality which has been or may be 
acquired by her nationals under the laws of 
the Allied and Associated Powers and in 
accordance with the decisions of the compe- 
tent authorities of these Powers pursuant 
to naturalisation laws or under treaty stip- 
ulations, and to regard such persons as hav- 
ing, in consequence of the acquisition of 
such new nationality, in all respects severed 
their allegiance to their country of origin. 

Article 279. 

The Allied and Associated Powers may Permanent, 
appoint consuls-general, consuls, vice-con- 
suls, and consular agents in German towns 



Recognition 
of new 

nationalities 
acquired by 
German and 
Allied and 

associated 

countries. 



Consuls and 
consular 
agents to be 
admitted. 



201 



Economic Clauses 

and pons. Germany undertakes to approve 
the designation of the consuls-general, con- 
sols, vice-consuls, ami consular agents, 

whose names shall lv notified to her, and 
to admit thorn to the exercise of their func- 
tions in conformity with the usual rules and 
customs. 



Chapter V. 



GENERAL ARTICLES. 



Article 2S0. 



Period of 
time dor] _- 

whu-b a 
of the pre- 
ceding obli- 

remaiu in 
etlevt. 



The obligations imposed on Germany by 

Chapter 1 and by Articles 1'Tl and 272 of 
Chapter II above shall eease to have effect 
tive years from the date of the coming into 
force of the present Treaty, unless other- 
wise provided in the text, or unless the 
Council of the League of Nations shall, at 
least twelve months before the expiration 
of that period, decide that these obligations 
shall bo maintained for a further period 
with or without amendment. 

Article 276 of Chapter IV shall remain in 
operation, with or without amendment, 
after the period of five years for stub fur- 
ther period, if any. not exceeding five years, 
as may be determined by a majority of the 
Council of the League of Nations, 

202 



Economic Clauses 

Article 281. 

ao'™.ent. If ^io Gorman Government engages in 
RtaS? international trade, it shall not in respect 
Smfunityai thereof have or be deemed to have any 
knvereign. j.jo^ts, privileges or immunities of sov- 
ereignty. 

Section II. 
tebatibs. 

Article 282. 

From the coming into force of the present 
Treaty and subject to the provisions there- 
of the multilateral treaties, conventions and 
agreements of an economic or technical 
character enumerated below and in the sub- 
sequent Articles shall alone be applied as 
between Germany and those of the Allied 
and Associated Powers party thereto: 

Relat t T,?, , (1) Conventions of March 14, 1884, De- u.s.aptrty. 

re-established v ' ' ' 

muwLterai cember 1, 1886, and March 23, 1887, and 
3$Xl Final Protocol of July 7, 1887, regarding 
the protection of submarine cables. 

(2) Convention of October 11, 1900, re- Kur0 « 1<an - 
garding the international circulation of 
motor-cars. 

(3) Agreement of May 15, 1886, regard- European, 
ing the sealing of railway trucks subject to 
customs inspection, and Protocol of May 
18, 1907. 

203 



tiouul umi 'in;. 



Economic Clauses 

(4) Agreement of May 15, 1SS6, regard- Europe*, 
ing the technical standardisation of rail- 
ways. 

(6) Convention of July 5, 1S90, regard- o.s.apartar. 
ing the publication of customs tariffs and 
the organisation of an International Union 
for the publication of customs tariffs. 

(6) Convention of December 31, 1913. European " 
aiding the unification of commercial 

statistics. 

(7) Convention of April 25, 1907, regard- European. 
ing the raising of the Turkish customs 
tariff. 

(5) Convention of March 14, 1S57, for u.s.aparty. 
the redemption of toll dues on the Sound 

and Belts. 

(9) Convention of June 22, 1861, for the European " 
redemption of the State Toll on the Elbe. 

(10) Convention of July 1G, 1SC3, for the European, 
redemption of the toll dues ou the Scheldt. 

(11) Convention of October 29, 1888, re- 
garding the establishment of a definite ar- 
rangement guaranteeing the free use of the 
Suez Canal. 

(12) Convention of September 23, 1910, g^JEg, 
respecting the unification of certain regu- £55r«5 
lations regarding collisions and salvage at 

sea. 

204 



Economic Clauses 

(13) Convention of December 21, 1904, European. 
regarding the exemption of hospital ships 
from dues and charges in ports. 

(44) Convention of February 4, 1898, re- European. 
garding the tonnage measurement of ves- 
sels for inland navigation. 

(15) Convention of September 26, 1900, European. 
for the suppression of night work for 
women. 

(1G) Convention of September 26, 1906, u.s.a P arty. 
for the suppression of the use of white phos- 
phorus in the manufacture of matches. 

(17) Conventions of May 18, 1904, and u.s.a P arty. 
May 4, 1910, regarding the suppression of 
the White Slave Traffic. 

(IS) Convention of May 4, 1910, regard- u - s - a party - 
ing the suppression of obscene publications. 

(19) Sanitary Conventions of January c.s. aP arty. 
30, 1892, April 15, 1893, April 3, 1894, 

March 19, 1897, and December 3, 1903. 

(20) Convention of May 20, 1875, regard- European - 
ing the unification and improvement of the 
metric system. 

(21) Convention of November 29, 1906, European - 
regarding the unification of pharmacopceial 
formula? for potent drugs. 

(22) Convention of November 16 and 19, u. s. a party. 
1885, regarding the establishment of a con- 
cert pitch. 

205 



Economic Clans - 

Convention of June 7. 1905, regard- fr— t— ■ 
ing the creation of an International Agri- 
cultural Institute at Rome. 

(24) Conventions of November 3, 1881, *•»> 
and April 15, 1889, regarding precautionary 
measures against phylloxera. 

5] Convention of March 19, 1902, re- JJ,« U 

garding the protection of birds useful to 
agriculture. 

(26) Convention of June 1-. 1902, as to 
the protection of minors. 

A:: 283, 

Prom the coming into force of the present 

Treaty the High Contracting Parties shall 
apply the conventions and agreements here- 
inafter mentioned, in so far as concerns 
them, on condition that the special stipu- 
lations contained in this Article are ful- 
filled by German v. 

Posted Conventions : 

Conventions and agreements of the Uni- r - s »r , * rtr - 
versa] Postal Union concluded at Vienna, 
July 4. 1891. 

Conventions and agreements of the Postal 
Union signed at Washington, June 15, 1897. 

Conventions and agreements of the Postal 
Union signed at Rome, May 26, 1906. 

206 



Economic Clauses 



Germany 
to conclude 
reciprocal 
postal and 
telegraphic 

n(rriM'iiiciit8 

widi the new 
states. 



U. S. not a 

party. 



Telegraph i<- ( 'on rent ions : 

International Telegraphic Conventions p ar ty. nota 
signed at St. Petersburg July 10-22, 1875. 

Regulations and Tariffs drawn up by the 
International Telegraphic Conference, Lis- 
bon, June 11, 1908. 

Germany undertakes not to refuse her 
assent to the conclusion by the new States 
of tlie special arrangements referred to in 
the conventions and agreements relating to 
the Universal Postal Union and to the In- 
ternational Telegraphic Union, to which the 
said new States have adhered or may adhere. 



Article 281. 



Application 
of Radio- 
Telegraphic 

convention. 



Oermany to 
be bound by 
poHsiblc new 
radio- 
telegraphic 
convention. 



From the coming into force of the present USa P art y- 
Treaty the High Contracting Parties shall 
apply, in so far as concerns them, the In- 
ternational Radio-Telegraphic Convention 
of July 5, 1912, on condition that Germany 
fulfils the provisional regulations which 
will be indicated to her by the Allied and 
Associated Powers. 

If within five yearn after the coming into Aiugedtobe 

necessary 

force of the present Treaty a new conven- for military 
tion regulating international radio-tele- 
graphic communications should have been 
concluded to take the place of the Conven- 
tion of July 5, 1912, this new convention 
shall bind Germany, even if Germany should 



reasons. 



207 



Economic Clauses 

refuse either to take part in drawing up the 
convention, or to subscribe thereto. 

This new convention will likewise replace 
the provisional regulations in force. 



Revival of 
North Sea 
fisheries 
convention. 



Revival of 
North Sea 
liquor trutiic 
convention 



Article 285. 

From the coming into force of the present 
Treaty, the High Contracting Parties shall 
apply in so far as concerns them and under 
the conditions stipulated in Article 272, the 
conventions hereinafter mentioned : 

(1) The Conventions of May 6, 1882, and European. 
February 1, 1889, regulating the fisheries in 

the North Sea outside territorial waters. 

(2) The Conventions and Protocols of European. 
November 16, 1887, February 14, 1893, and 
April 11, 1894, regarding the North Sea 
liquor traffic. 



Revival of 

International 

Conventions 

covering: pat- 
ents, trade- 
marks, and 
copyrights. 



Article 2SG. 

The International Convention of Paris of u-s. apart?. 
March 20, 1883, for the protection of in- 
dustrial property, revised at Washington on 
June 2, 1911 ; and the International Con- 
vention of Berne of September 9, 1886, for 
the protection of literary and artistic works, 
revised at Berlin on November 13, 190S, and 
completed by the additional Protocol signed 
at Berne on March 20. 1914, will again come 



20S 



Renewal of 
Convention 
relating 
to civil 
procedure. 



Economic Clauses 

into effect as from the coming into force of 
the present Treaty, in so far as they are not 
affected or modified by the exceptions and 
restrictions resulting therefrom. 

Article 2S7. 

From the coming into force of the present Europe- 
Treaty the High Contracting Parties shall 
apply, in so far as concerns them, the Con- 
vention of The Hague of July 17, 1905, re- 
lating to civil procedure. This renewal, 
however, will not apply to France, Portu- 
gal and Koumania. 

Article 288. 



National 
treatment 
of German 
trade in 
Samoa to 
terminate. 



The special rights and privileges granted These rights, 

* ° x o o granted by U. 

to Germany by Article 3 of the Convention s. and Great 

" " Britain, were 

of December 2, 1899, relating to Samoa shall ft™ K^ 
be considered to have terminated on August JS mt 
4, 1914. 



Article 289. 



Revival of 
bilateral 
treaties with 
Germany, in 
whole or in 
part, upon 
notification by 
Allied or 
Associated 
Powers, 



Each of the Allied or Associated Powers, 
being guided by the general principles or 
special provisions of the present Treaty, 
shall notify to Germany the bilateral treat- 
ies or conventions which such Allied or 
Associated Power wishes to revive with Ger- 
many. 

209 



Economic Claus s 



- - 

■ th 



Sis 



Bilateral 
tre.it ies and 
com 

- re- 
vived remain 
! red. 



The notification referred to in the present 
Article shall be made either directly or 
through the intermediary of another Tower. 
Receipt thereof shall be acknowledged in 

writing by Germany. The date of tlie re- 
vival shall be that of the notification. 

The Allied and Associated Towers under- 
take among Themselves not to revive with 
Germany any eon vent ions or treaties which 
are not in accordance with the terms of the 
present Treaty. 

The notification shall mention any pro- 
visions of the said conventions and treaties 
which, not being in accordance with the 
terms of the present Treaty, shall not be con- 
sidered as revived. 

In ease of any difference of opinion, the 
League of Nations will be called on to de- 
cide. 

A period of six months from the coming 
into force of the present Treaty is allowed to 
the Allied and Associated Towers within 
which to make the notification. 

Only those bilateral treaties and conven- 
tions which have been the subject of sueh a 
notification shall be revived between the 
Allied and Associated Towers and Ger- 
many: all the others are and shall remain 
abrogated. 

The above regulations apply to all bilat- 
eral treaties or conventions existing be- 
tween all the Allied and Assoeiated Powers 



-•.:ch the 
Allied Powetl 

dtvUle what 
treaties shall 

h eJ. 
t -^ tbfl term 
ot these 
treaties 
QermuGF 
will still be 

. o re- 
mmn Most 

cf them l\v 

c t .v rive 
months' 
notice. 



£10 



Economic Clauses 



Enemy 
treaties en- 
tered Into 
during the 

\V;ir are 
abrogated by 
this clauBe. 



Most-favored- 
nal ion treat- 
ment under 
pre- War 

I enemy 
treaties. 

I 



Enemy 
treaties with 
Russia and 

15 



signatories to the present Treaty and Ger- 
many, even if the said Allied and Associated 
Towers have not been in a state of war with 
( termany. 

Article 290. 



Germany recognizes that all the treaties, 
conventions or agreements which she has 
concluded with Austria, Hungary, Bulgaria 
or Turkey since August 1, 1914, until the 
coming into force of the present Treaty are 
and remain abrogated by the present Treaty. 

Article 291. 

Germany undertakes to secure to the 
Allied and Associated Powers, and to the 
officials and nationals of the said Powers, 
the enjoyment of all the rights and advan- 
tages of any kind which she may have 
granted to Austria, Hungary, Bulgaria or 
Turkey, or to the officials and nationals of 
these States by treaties, conventions or ar- 
rangements concluded before August 1, 1911, 
so long as those treaties, conventions or ar- 
rangements remain in force. 

The Allied and Associated Powers reserve 
the right to accept or not the enjoyment of 
these rights and advantages. 

Article 292. 

Germany recognizes that all treaties, con- ™es**vT 
ventions or arrangements which she con- Gennan 

211 



Economic Clai 



R Nimania 



Annuls con- 

granted un- 
der pressure 
to Gen 
by Ru 

:es 
formerly 
constituting 

• : of 
Ruse 



Allied and 
Associated 
Powers to re- 
el ne benefits 
of German 
treaties eon- 
eluded with 
neutrals. 



eluded with Russia, or with any State or 
Government of which the territory pre- 
viously formed a part of Russia, or with 
Roumania, before August 1, 1914. or after 
that date until coming into force of the pres- 
ent Treaty, are and remain abrogated. 

Article 293. 

Should an Allied or Associated Power. 
Russia, or a State or Government of which 
the territory formerly const it uted a part of 
Russia, have been forced since August 1, 
1914, by reason o( military occupation or by 
any other means or for any other cause, to 
giant or to allow to be granted by the act of 
any public authority, concessions, privileges 
and favours of any kind it) Germany or to a 
German national, such concessions, privi- 
leges and favours are ipso facto annulled by 
the present Treaty. 

No claims or indemnities which may re- 
sult from this annulment shall be charged 

ainst the Allied or Associated Powers or 
the Powers, States, Governments or public 
authorities which are released from their en- 
gagements by the present Article. 

Article 294 

From the coming into force of the present 
Treat v Germany undertakes to nive the Al- 
lied and Associated Powers and their na- 
tionals the benelit ip<o facto of the rights 

212 



treaties with 
Kinl.r. 
well as 
the Ikraiue. 



Economic Clauses 

and advantages of any kind which she lias 
granted by treaties, conventions, or arrange- 
ments to non-belligerent States or their na- 
tionals since August 1, 1914, until the com- 
ing into force of the present Treaty, so long 
as those treaties, conventions or arrange- 
ments remain in force. 

Article 295. 
SStk&a* Those of the High Contracting Parties ggj^, 

of contnu'tini; -. <■ . . . -. ■, ■, .1 not ratified 

parties in who have not yet signed, or who have signed by c , PI , ll . ltiyi 
ofi9i2. ' but not yet ratified, the Opium Convent ion 
signed at The Hague on January 23, 1912, 
agree to bring the said Convention into 
tone, and for this purpose to enact the nec- 
essary legislation without delay and in any 
ease within a period of twelve months from 
the coming into force of the present Treaty. 
Furthermore, they agree that ratification 
of the present Treaty should in the case of 
Powers which have not yet ratified the 
Opium Convention he deemed in all respects 
equivalent to the ratification of that Conven- 
tion and to the signature of the Special 
Protocol which was opened at The Hague in 
accordance with the resolutions adopted by 
the Third Opium Conference in 1914 for 
bringing the said Convention into force. 

For this purpose the Government of the 
French Republic will communicate to the 
Government of the Netherlands a certified 
copy of the protocol of the deposit of rati- 

213 



Economic Clauses 

fications of the present Treaty, and will in- 
vite the Government of the Netherlands to 
accept and deposit the said certified copy as 
if it were a deposit of ratifications of the 
Opium Convention and a signature of the 
Additional Protocol of 1914. 

Section III. 

DEBTS. 

Article 206. 



Provides for 
clearing- 
house system 
for the col- 
lection of 
debts, and 
the use of 
proceeds of 
enemy prop- 
erty. 



There shall be settled through the inter- 
vention of clearing offices to be established 
by each of the High Contracting Parties 
within three months of the notification re- 
ferred to in paragraph (e) hereafter the 
following classes of pecuniary obligations : 

(1) Debts payable before the war and Jjjfj.™ 1 ^* 
due by a national of one of the Contracting Syg^g* 
Powers, residing within its territory, to a i^t&» 
national of an Opposing Power, residing artlcle) 
within its territory; 

(2) Debts which became payable during 
the war to nationals of one Contracting 
Power residing within its territory and 
arose out of the transactions or contracts 
with the nationals of an Opposing Tower, 
resident within its territory, of which the 
total or partial execution was suspended on 
account of the declaration of war ; 



2U 



Economic Clauses 



Prohibits 
Allied and 
enemy na- 
tionals from 
settling their 
debts with 
each other, 
or even from 



(3) Interest which has accrued due be- 
fore and during the war to a national of 
one of the Contracting Powers in respect of 
securities issued by an. Opposing Power, 
provided that the payment of interest on 
such securities to the nationals of that 
Tower or to neutrals has not been suspended 
during the war; 

(-4) Capital sums which have become 
payable before and during the war to na- 
tionals of one of the Contracting Powers in 
respect of securities issued by one of the 
Opposing Powers, provided that the pay- 
ment of such capital sums to nationals of 
that Power or to neutrals has not been sus- 
pended during the war. 

The proceeds of liquidation of enemy 
property, rights and interests mentioned in 
Section IV and in the Annex thereto will be 
accounted for through the Clearing Offices, 
in the currency and at the rate of exchange 
hereinafter provided in paragraph (d), and 
disposed of by them under the conditions 
provided by the said Section and Annex. 

The settlements provided for in this Ar- 
ticle shall be effected according to the fol- 
lowing principles and in accordance with 
the Annex to this Section : 

(a) Each of the High Contracting Par- 
ties shall prohibit, as from the coming into 
force of the present Treaty, both the pay- 
ment and the acceptance of payment of such 

215 



Economic Clauses 

debts, and also all communications between 
• : the interested parties with regard to the 
settlement of the said debts otherwise than 
through the Clearing Offices; 

(6) Each of the High Contracting- Par- 
yment ties shall be respectively responsible for 
owel by its the payment of such debts due by its na- 
formerenemy clonals, except in the cases where before the 
war The debtor was in a state of bankruptcy 
or failure, or had given formal indication 
of insolvency or where the debt was due by 
a company whose business has been liqui- 
dated under emergency legislation during 
the war. Nevertheless, debts due by the in- 
habitants of territory invaded or occupied 
by the enemy before the Armistice will not 
be guaranteed by the States of which, those 
territories form part; 

(c) The sums due to the nationals of 
one of the High Contracting Parties by the 
nationals of an Opposing State will be 
debited to the Clearing- Office of the coun- 
try of the debtor, and paid to the creditor 
by the Clearing Office of the country of the 
creditor; 

R:1 V of . (d) Debts shall be paid or credited in the 

exchange in v r 

rfdebt.™* currency of such one of the Allied and As- 
sociated Powers, their colonies or protec- 
torates, or the British Dominions or India, 
as may be concerned. If the debts are pay- 
able in some other currency they shall be 

216 



Economic Clauses 

paid or credited in the currency of the coun- 
try concerned, whether an Allied or Asso- 
ciated Power, Colony, Protectorate, British 
Dominion or India, at the pre-war rate of 
exchange. 

For the purpose of this provision the 
pre-war rate of exchange shall be defined 
as the average cable transfer rate prevail- 
ing' in the Allied or Associated country con- 
cerned during the month immediately pre- 
ceding the outbreak of war between the said 
country concerned and Germany. 

If a contract provides for a fixed rate of 
exchange governing the conversion of the 
currency in which the debt is stated into 
the currency of the Allied or Associated 
country concerned, then the above provi- 
sions concerning the rate of exchange shall 
not apply. 

Tn the case of new States the currency 
in which and the rate of exchange at which 
debts shall be paid or credited shall be de- 
termined by the Reparation Commission 
provided for in Tart VIII (Reparation) ; 

Does not (f ) The provisions of this Article and of »wun- 

apply to any v ' l pictcd i hat 

Allied state f]i Annex hereto shall not apply as between thq y- s - ., 

unless adopted rr * would avail 

Snemonttf" Germany on the one hand and any one of Ke°and ia 
gg ratine* the Allied and Associated Powers, their S?5k2fir. 
colonies or protectorates, or any one of the 
British Dominions or India on the other 
hand, unless within a period of one month 
from the deposit of the ratification of the 

217 



housa system. 



Economic Clauses 

present Treaty by the Power m ques- 
tion, or of the ratification on behalf 
of stub Dominion or of India, notice 
to that effect is given to Germany by 
the Government of sueh Allied or Associ- 
ated Power e:- of snch Domini of India 
as the ease may be J 

(/) The Allied ami Associated Powers 
who have adopted this Article and the An- 

x hereto may agree between themselves 
to apply them to their respective nationals 
established in their territory so far as re- 
cards matters between their nationals and 
Gorman nationals. Tn this ease the pay- 
ments made by the application of this pro- 
vision will be subject to arrangements be- 
tween the Allied ami Associated Clearing 
Offices concerned. 



ANNEX 
1. 
Eaeli of the Rich Contracting Parties ■ R »**? tt ' 

\n UUS UM9I 

will, within three months from the notifica- 
tion provided for in Article 296, paragraph .;*. 
(e), establish a Clearing Office for the eel & 

lection and payment of enemy debts. rtopttha 

-*- -1--.T • -\v> t t-i'ii system. 

Local Clearing Offices may be established 
for any particular portion o( the territories 
of the High Contracting Parties. Snch 

218 



Economic Clauses 

local Clearing Offices may perform, all the 
functions of a central Clearing Office in 
their respective districts, except that all 
transactions with the Clearing Office in the 
Opposing State must be effected through 
I lie central Clearing Office. 



2. 



In this Annex the pecuniary obligations 
referred to in the first paragraph of Ar- 
ticle 29G are described as "enemy debts," 
the persons from whom the same are dne 
as "enemy debtors," the persons to whom 
they ore dne as "enemy creditors," the 
Clearing Office in the country of the credi- 
tor is called the "Creditor Clearing Office," 
and the Clearing Office in the country of the 
debtor is called the "Debtor Clearing 
Office." 



3. 



The High Contracting Parties will sub- 
ject contraventions of paragraph (a) of 
Article 296 to the same penalties as are at 
present provided by their legislation for 
trading with the enemy. They will simi- 
larly prohibit within their territory all 
legal process relating to payment of enemy 
debts, except in accordance with the pro- 
visions of this Annex. 

219 



Economic Clauses 



The Government guarantee specified in 
paragraph (b) of Article 296 shall take 

effect whenever, for any reason, a debt shall 
not he recoverable, except in a case where at 
the date of the outbreak of war the debt 
was barred by the laws of prescription in 
force in the country of the debtor, or where 
the debtor was at that time iu a state of 
bankruptcy or failure or had given formal 
indication of insolvency, or where the debt 
was due by a company whose business has 
been liquidated under emergency legisla- 
tion during the war. In such case the pro- 
cedure specified by this Annex shall apply 
to payment of the dividends. 

The terms "bankruptcy" and " failure" 
refer to the application of legislation pro- 
viding for such juridical conditions. The 
expression ''formal indication of insol- 
vency" bears the same meaning as it has in 
English law. 



Creditors shall give notice to the Creditor 
Clearing Office within six months of its es- 
tablishment of debts due to them, and shall 
furnish the Clearing Office with any docu- 
ments and information required of them. 

The nidi Contracting Farties will take 
all suitable measures to trace and punish 

220 



Economic Clauses 

collusion between enemy creditors and debt- 
ors. The Clearing Office will communi- 
cate to one another any evidence and infor- 
mation which might help the discovery and 
punishment of such collusion. 

The High Contracting Parties will fa- 
cilitate as much as possible postal and tele- 
graphic communication at the expense of 
the parties concerned and through the in- 
tervention of the Clearing Offices between 
debtors and creditors desirous of coming to 
an agreement as to the amount of their debt. 

The Creditor Clearing Office will notify 
the Debtor Clearing Office of all debts de- 
clared to it. The Debtor Clearing Office 
will, in due course, inform the Creditor 
Clearing Office which debts are admitted 
and which debts are contested. In the lat- 
ter case, the Debtor Clearing Office will give 
the grounds for the non-admission of debt. 

6. 

When a debt has been admitted, in whole 
or in part, the Debtor Clearing Office will 
at once credit the Creditor Clearing Office 
with the amount admitted, and at the same 
time notify it of such credit. 

7. 

The debt shall be deemed to be admitted 
in full and shall be credited forthwith to 

221 



Economic Claust s 

the Creditor Clearing- Office unless within 
three mom lis from the receipt of the notifi- 
cation or soch longer time as may be agreed 
to bv the Creditor Clearing Office notice 

has been given by the Debtor Clearing Of- 
fice that it is not admitted. 

8. 

When the whole or part of a debt is not 
admitted the two Clearing Offices will ex- 
amine into the matter jointly and will en- 
deavour to bring the parties to an agree- 
ment. 

9. 

The Creditor Clearing Office will pay to 
the individual creditor the sum credited to 
it out of the funds placed at its disposal by 

the Government of its country and in ac- 
cordance with the conditions fixed by the 
said Government, retaining any sums con- 
sidered necessary to cover risks, expenses 
or commissions. 

10. 

Any person having claimed payment of 
an enemv debt which is not admitted in 

« 

whole or in part shall pay to the clearing 
office, by way of fine, interest at 5 per cent, 
on the part not admitted. Any person hav- 
ing unduly refused to admit the whole or 

999 



Economic Clauses 

part of a debt claimed from him shall pay, 
by way of fine, interest at 5 per cent, on the 
amount with regard to which his refusal 
shall be disallowed. 

Such interest shall run from the date of 
expiration of the period provided for in 
paragraph 7 until the date on which the 
claim shall have been disallowed or the debt 
paid. 

Each Clearing Office shall in so far as it 
is concerned take steps to collect the fines 
above provided for, and will be responsible 
if such fines cannot be collected. 

The fines will be credited to the other 
Clearing Office, which shall retain them as 
a contribution towards the cost of carrying 
out the present provisions. 



11. 



The balance between the Clearing Offices 
shall be struck monthly and the credit bal- 
ance paid in cash by the debtor State within 
a week. 

Nevertheless, any credit balances which 
may be due by one or more of the Allied 
and Associated Towers shall be retained 
until complete payment shall have been ef- 
fected of the sums due to the Allied or Asso- 
ciated Powers or their nationals on account 
of the war. 

223 



Bcomomit Claun s 

12. 

To facilitate dis^;>> ; ween the Clear* 

ing Offices each of them 5] all have a repre- 
- • itive a: the place 1 other is es- 

tablished. 

13. 

Except for special reasons all discussj 
in regard to claims will, so far as ] ssi 
take place at the Debtor Clearing Office, 

14. 

Tn conformity -with Article 296, para- 

. ph (6), the High Contracting Parties 

responsible for the payment of the enemy 

bts owing bv their nationals. 

The Debtor Clearing Office Avill therefore 
credit the Creditor Clearing Office with all 
debts admitted, even in rase of inability to 
collect them from the individual debtor. T 
Governments concerned will, nevertheless, 
invest their respective Clearing Offices with 
all necessary powers for the recovery of 
debts which have been admitted. 

As an exception, the admitted debts ow- 
ing bv persons having suffered injury from 
acts of war shall only be credited to the 
Creditor Clearing Office when the compensa- 
tion dne to the person concerned in respect 
of such injury shall have been paid. 

224 



Economic Clauses 

15. 

Eacli Government will defray the expenses 
of the Clearing Office set up in its territory, 
including the salaries of the staff. 

16. 

Where (he two Clearing Offices arc unable 
to agree whether a debt claimed is due, or 
in case of a difference between an enemy 
debtor and an enemy creditor or between the 
Clearing Offices, the dispute shall either be 
referred to arbitration if the parties so 
agree under conditions fixed by agreement 
between them, or referred to the Mixed 
Arbitral Tribunal provided for in Section 
VI hereafter. 

At the request of the Creditor Clearing 
Office the dispute may, however, be sub- 
mitted to the jurisdiction of the Courts of 
the place of domicile of the debtor. 

17. 

Recovery of sums found by the Mixed 
Arbitral Tribunal, the Court, or the Arbi- 
tration Tribunal to be due shall be effected 
through the Clearing Offices as if these sums 
were debts admitted by the Debtor Clear- 
ing Office. 

18. 

Each of the Governments concerned shall 
appoint an agent who will be responsible for 

oorr 



Economic Clause s 

the presentation to the Mixed Arbitral Tri- 
bunal of the cases conducted ou behalf of its 
Clearing Office. This agent will exercise a 

general control over the representatives or 
counsel employed by its? nationals. 

Decisions will be arrived at on docu- 
mentary evidence, but it will be open to the 
Tribunal to hear the parties in person, or 
according to their preference by their rep 
seutatives approved by the two Governments 
or by the agent referred to above, who shall 
bo competent to intervene along with the 
party or to reopen and maintain a claim 
abandoned by the same. 

19. 

The Clearing Offiees concerned will lay 
before the Mixed Arbitral Tribunal all the 
information and documents in their posses- 
sion, so as 10 enable the Tribunal to decide 
rapidly on the eases which are brought be- 
fore it. 

20. 

Where one of the parties concerned ap- 
peals against the joint decision of the two 
Clearing Offices he shall make a deposit 
against the eosts. which deposit shall only 
be refunded when the first judgment is modi- 
fied in favour of the appellant and in 
proportion to the success he may attain, his 
opponent in case of such a refund being re- 



Economic, Chi uses 

quired l<> pay an equivalent proportion of 
the costs and expenses. Security accepted 
by the Tribunal may be substituted for a de- 
posit. 

A fee of 5 per cent of the amount in dis- 
pute shall be charged in respect of all cases 
brought before the Tribunal. This fee shall, 
unless the Tribunal directs otherwise, be 
borne by the unsuccessful party. Such fee 
shall be added to iho deposit referred to. It 
is also independent of the security. 

The Tribunal may award to one of the 
parties a sum in respect of the expenses of 
the proceedings. 

Any sum payable under this paragraph 
shall be credited to the < Hearing Office of the 
successful party as a. separate item. 

21 

M 1 • 

With a view to the rapid settlement of 
claims, due regard shall be paid in the ap- 
pointment of all persons connected with the 
Clearing Offices or with the Mixed Arbitral 
Tribunal to their knowledge of the language 
of the other country concerned. 

Each of the Clearing Offices will be at 
liberty to correspond with the other and to 
forward documents in its own language. 

Subject to any special agreement to the 
contrary between the Governments con- 

16 227 



Economic Clauses 

cerned, debts shall carry interest in accord- 
ance with the following- provisions: 

Intel est shall not be payable on sums of 
money due by way of dividend, interest or 
other periodical payments which themselves 
represent interest in capital. 

The rate of interest shall be 5 per cent. 
per annum except in eases where, by con- 
tract, law or custom, the creditor is entitled 
to payment of interest at a different rate. 
In such eases the rate to which he is entitled 
shall prevail. 

Interest shall run from the date of com- 
mencement of hostilities (or, if the sum of 
money to be recovered fell due during the 
war, from the date at which it fell due) 
until the sum is credited to the Clearing 
Office of the creditor. 

Sums dm 1 by way of interest shall be 
ireated as debts admitted by the Clearing 
Office and shall be credited to the Creditor 
Cleariug Office iu the same way as such 
debts. 

_o. 

Where by decision of the Clearing Offices 
or the Mixed Arbitral Tribunal a claim is 
held not to fall within Article 29(5, the 
creditor shall be at liberty to prosecute the 
claim before the Courts or to take such other 
proceedings as may be opeu to him. 

The presentation of a claim to the Clear- 

228 



Economic Clauses 

ing Office suspends the operation of any 
period of prescription. 

24. . 

The High Contracting Parties agree to 
regard the decisions of the Mixed Arbitral 
Tribunal as final and conclusive, and to ren- 
der them binding upon their nationals. 

or-; 

In any case where a Creditor Clearing 
Office declines to notify a claim to the 
Debtor Clearing Office, or to take any step 
provided for in this Annex, intended to make 
effective in whole or in part a request of 
which it has received due notice, the enemy 
creditor shall be ent Ltled to receive from the 
Clearing Office a certificate setting out the 
amount of the claim, and shall then be en- 
titled to prosecute the claim before the 
courts or to take such other proceedings as 
may be open to him. 

Section IV. 
property, rights and interests. 

Article 297. 

The question of private property, rights 
and interests in an enemy country shall be 

229 



Economic Clauses 



Requires the 
restoration 
of Allied 
property in 
Ciermany not 
already sold. 



Authorizes 
the Allies to 
Bell in future 
German prop- 
erty in their 
territory, at 
their option. 



German owner 
shall not dis- 
pose of such 
property with- 
out consent 
of State 
interested. 



settled according to the principles laid 
down in this Section and to the provisions 
of the Annex hereto. 

(a) The exceptional war measures and 
measures of transfer (defined in paragraph 
3 of the Annex hereto) taken by Germany 
with respect to the property, rights and in- 
terests of nationals of Allied or Associated 
Powers, including companies and associa- 
tions in which they are interested, when 
liquidation has not been completed, shall 
be immediately discontinued or stayed and 
the property, rights and interests concerned 
restored to their owners, who shall enjoy 
full rights therein in accordance with the 
provisions of Article 29S. 

(b) Subject to any contrary stipulations 
which may be provided for in the present 
Treat}', the Allied and Associated Powers re- 
serve the right to retain and liquidate all 
property, rights and interests belonging at 
the date of the coming into force of the pres- 
ent Treaty to German nationals, or com- 
panies controlled by them, within their terri- 
tories, colonies, possessions and protector- 
ates, including territory ceded to them by 
the present Treaty. 

The liquidation shall be carried out in ac- 
cordance with the laws of the Allied or Asso- 
ciated State concerned, and the German 
owner shall not be able to dispose of such 



230 



Economic Clauses 



The 

prices and 
valuations 
for future 
gales in 
Allied coun- 
tries will bo 
fixed by tli" 
laws of sixli 
countries. 



As between 
Allies and 
Germany 
all sales 
and actions 
heretofore 
taken under 
exceptional 
war measures 
are confirmed. 



Claims 
of Allied 
citizens for 
injuries to 
their prop- 
erty in Ger- 
many to bo 
passed upon 



property, rights or interests nor to subject 
them to any charge without the consent of 
that State. 

German nationals who acquire ipso facto 
the nationality of an Allied or Associated 
Power in accordance with the provisions of 
the present Treaty will not be considered as 
German nationals within the meaning of this 
paragraph. 

(c) The price or the amount of compensa- 
tion in respect of the exercise of the right 
referred to in the preceding paragraph (ft) 
will be fixed in accordance with the method« 
of sale or valuation adopted by the laws of 
the country in which the property has been 
retained or liquidated. 

(d) As between the Allied and Associated 
Powers or their nationals on the one hand 
and Germany or her nationals on the other 
hand, all the exceptional war measures, or 
measures of transfer, or acts done or to be 
done in execution of such measures as de- 
fined in paragraphs 1 and 3 of the Annex 
hereto shall be considered as final and bind- 
ing upon all persons except as regards the 
reservations laid down in the present 
Treaty. 

(e) The nationals of Allied and Asso- 
ciated Powers shall be entitled to compensa- 
tion in respect of damage or injury inflicted 
upon their property, rights or interests, in- 

231 



s • 



association in t 
- ed, in German g 

it exist* on August 1. 191 i. V 
ca a either of the excei \ ■■.,:.<■ 

asores of trans 
. - rt7 paj si \ • : v 

h * adi chums made iii this respect by such 

tionals shall be investigated, and the total 
of the c< - i shall detei mined by 

the Mixed A: tral aal provided foi 

s VI or by an Arbitrator appointed 

by that Tribunal. This < pensa i shall 
be borne by G and may arged 

upon the property of German nationals 
within the territory or under t; i 1 of 

the claimant's State. This property may be 
constituted as a pledge for enemy liabili. s 
under the conditions fixed by paragraph I of 
the Annex hereto. The payment of this com- 
pensation may be made by the Allied or As- 
sociated State, and the amount will be 
debited to Germany. 



RtV . , (/) Whenever a national o( an Allied or ;,, J . § 

Associated Power is entitled to property 
\ which has been subjected to a measure o( 

: >.vun- . > • i 

transfer in German territory and express - 

no* . . . . . , .' , . 

u a desire tor us restitution, his elaun tor com- 

proper: v, 

pensation in accordance with paragraph (e) 
shall be satisfied by the restitution of the 
said property if it still exists in speeie. 

In sueh ease Germany shall take all uee- 



Economic Clauses 

essary slops to restore the evicted owner to 
the possession of his property, free from all 
encumbrances or burdens willi which it may 
have been charged after the liquidation, and 
to indemnify all third parlies injured by the 
restitution. 

If (lie restitution provided for in this par- 
agraph cannot bo effected, private agree- 
ments arranged by the intermediation of the 
Powers concerned or the Clearing Offices 
provided for in the Annex to Section 1IT 
may bo made, in order lo secure 1 that the na- 
tional of the Allied or Associated Power may 
secure compensation for the injury referred 
to in paragraph (e) by Hie granl of ad- 
vantages or equivalents which he agrees to 
accepl in place of the property, rights or 
interests of which he was deprived. 

Through restitution in accordance with 
this Article, (he price or (in 4 amount of com- 
pensation fixed by the application of para- 
graph (r) will he reduced by the actual 
value of the property restored, account be- 
ing taken of compensation in respect of loss 
of use or deterioration. 

(g) The rights conferred by paragraph 
(/) are reserved to owners who are nationals 
of Allied ov Associated Towers within whose 
territory legislative measures prescribing 
the general liquidation of enemy property, 

233 



jnomic Clamcs 



General 
rules 
dispc > 

-'eevls 



rights or interests were nor applied before 
the signature of the Armistice. 

{Ji ) Except in cases where, by application 
of paragraph (J ... stitutions in specie have 
boon made, the net proceeds of sales of 
enemy property, rights or interests wherever 

situated carried car either by virtue of war 

legislation, or by application of this Article, 

and in general all cash assets of enemies, 

shall be dealt with as follows : 

Tiu> r. s. 
(1) As regards Towers adopting Sett '.on .v.-.vt 

* to adopt 

III and the Annex thereto, the said proceeds sbc«« m 
and cash assets shall be credited to the 
Power of which the owner is a national, 
through the Clearing Office established 
thereunder; any credit balance in favour of 
Germany resulting therefrom shall be dealt 
with as provided in Article 243, 



proceed ot (2) As regards Powers not adopting Sec- 

odiassc - i non III and the Annex thereto, t lie proceeds 

Allied nationals 

heidbyoer- f the pi'opertv. rights and interests, and the 

many to be r r * 

atexvtoaid" caSQ ^sets, ot ' ^ u " nationals of Allied or As- 
Go™out! lis sociated Powers held by Germany shall be 
paid immediately to the person entitled 
thereto or to his Government; the proceeds 
o*GeE of the property, rights and interests, and the 

beatdisposai cash assets, of German nationals received by 
powersami an Allied or Associated Power shall be snb- 

may be applied 

to payment j^t to disposal bv such Power in accordance 

claims ana " l 

bvthittnieie. W ^ n ^ S * awa ano< regulations and may be 
applied in payment of the claims and debts 

234 



Concerns S. 
it" Section 1 11 
is not adopted. 



Economic (Utilises 

defined by this Article or paragraph 4 of 
the Annex hereto. Any property, rights 
and interests or proceeds thereof or cash as- 
sets not vised as above provided may be re- 
tained by the said Allied or Associated 
Power and if retained the cash value thereof 
sliall be dealt with as provided in Article 
243. 

Exceptional y n (], e caK0 f liquidations effected in new 
?rop!rty in States, which are signatories of the present 
newstetes. Treaty as Allied and Associated Powers, or 
in Slates which are not entitled to share in 
the reparation payments to be made by Ger- 
many, the proceeds of liquidations effected 
by such States shall, subject to the rights of 
the Reparation Commission under the pres- 
ent Treaty, particularly under Articles 235 
and 2(J0, be paid direct to the owner. If on 
application of that owner, the Mixed Arbi- 
tral Tribunal, provided for by Section VI 
of this Part, or an arbitrator appointed by 
that Tribunal, is satisfied that the conditions 
of the sale or measures taken by the Govern- 
ment of the State in question outside its 
general legislation were unfairly prejudicial 
to the price obtained, they shall have discre- 
tion to award to the owner equitable com- 
pensation to be paid by that State. 



Smanv to (*) Germany undertakes to compensate 
nu'uonVisfor her nationals in respect of the sale or re- 

235 



Economic Clause* 

myUu^en tOUtioll of tlioil' property, rights 01' iutOl'OStS 

in Allied or Associated States. 

Taxes .md (j) The amount of all taxes and imposts 

by Germany upon capital levied or to be levied by Ger- 

from Nov. 11, r J 

3, and up many on tlie property, rights and interests 

to three L ■ ' ° 

mouths after f r ] ie nationals of the Allied or Associated 

coming into 

|;^2' Towers from November 11, 1918, until three 
fecfTSected' months from the coming into force of the 

present Treaty, or, in the ease o( property, 
period. '' rights or interests which have been subjected 
to exceptional measures of war, until resti- 
tution in accordance with the present Treaty 
shall be restored to the owners. 



Article 298. 

Germany undertakes, with regard to the 
property, rights and interests, including 
companies and associations in which they 
were interested, restored to nationals of 
Allied and Associated Powers in accord- 
ance with the provisions of Article 
207, paragraph (a) or (/) : 

property. ice, i,/) to restore and maintain, except as ex- 

restored by 

Germanyto pressly provided in the present Treaty, the 

have same r • i i « 

property, rights and interests of the na- 
m, tionals oi Allied or Associated Towers in 

the legal position obtaining in respect of the 
property, rights and interests of German na- 
tionals under the laws in force before the 



fore the war. 



war ; 

23G 



Economic Clauses 

Germany (6) not to subject the property, rights or 

discriminate interests of the nationals of the xVllied or 

against Allied 

nationals in Associated Powers to any measures in dcro- 

troatment of " 

t 1 1 ni! |1 r!v rty ' gation of property rights which are not ap- 
SSm * plied equally to the property, rights and in- 

Sw£tion Q terests of German nationals, and to pay ade- 
quate compensation in the event of the appli- 
cation of these measures. 



ANNEX. 



Merely ampli- 
flea Art. 297 
('/) ; applies 
to all coun- 
tries alike, 
Including 
Qermainy. 



1. 

In accordance with the provisions of Ar- 
ticle 297, paragraph (tZ), the validity of 
vesting orders and of orders for the wind- 
ing up of businesses or companies, and of 
any other orders, directions, decisions or 
instructions of any court or any department 
of the Government of any of the High Con- 
tracting Parties made or given, or purport- 
ing to be made or given, in pursuance of 
Avar legislation with regard to enemy prop- 
erty, rights and interests is confirmed. The 
interests of all persons shall be regarded 
as having been effectively dealt with by any 
order, direction, decision or instruction 
dealing with property in which, they may 
be interested, whether or not such interests 
are specifically mentioned in the order, di- 
rection, decision, or instruction. No ques- 
tion shall be raised as to the regularity of 



Important 
for U. S., as 
it validates 
action of 
Alien Prop- 
erty Custo- 
dian, so far 
as German 
Government 
is concerned. 



237 



Economic Clausi 

a transfer of any property, rights or inter- 
ests dealt with in pursuance of any such 
order, direction, decision or instruction, 
lively action taken with regard to any 
property, business, or company, whether as 
regards its investigation, sequestration, 
compulsory administration, use, requisition, 
supervision, or winding up, the sale or 
management of property, rights or inter- 
ests, the collection or discharge of debts, 
the payment of costs, charges or expenses, 
or any other matter whatsoever, in pursu- 
ance of orders, directions, decisions, or in- 
structions of any court or of any depart- 
ment of the < rovernment of any of the High 
Contracting Parties, made or given, or par- 
porting to be made or given, in pursuance 
of war legislation with regard to enemy 
property, rights or interests, is confirmed. 
Provided that the provisions of this para- This proviso 

- 1 - * preserves 

graph shall not be held to prejudice the rfchtsof«u 

1 i •> citizens who 

titles to property heretofore acquired in ^;^ tr /; p " 
good faith and for value and in accordance S^«od 
with the laws of the country in which the ^ e '^ ed 
property is situated by nationals of the Al- 
lied and Associated Towel's. 

The provisions of this paragraph do not 
apply to such of the above-mentioned meas- 
ures as have been taken by the German au- 
thorities in invaded or occupied territory, 
nor to such of the above mentioned meas- 
ures as have been taken by Germany or the 

23S 



Economic Clauses 

German authorities since November 11, 
1918, all of which shall be void. 



Prevents^ 
claims being 
brought by 
Germany or 
its nationals 
on account 
of War 
measures. 



No claim or action shall be made or 
brought against any Allied or Associated 
Power or against any person acting on be- 
half of or under the direction of any legal 
authority or Department of the Govern- 
ment of such a Tower by Germany or by 
any German national wherever resident in 
respect of any act or omission with regard 
to his property, rights or interests during 
the war or in preparation for the war. 
Similarly no claim or action shall be made 
or brought against any person in respect 
Of any act or omission under or in accord- 
ance with the exceptional war measures, 
laws or regulations of any Allied or Asso- 
ciated Power. 



Intended to 
prevent 
claims on 
account of 
operation of 
our War 
legislation, 
e. g., black 
list of War 
Trade Board. 



Merely 
defines the 
terms used. 



In Article 297 and this Annex the expres- 
sion "exceptional war measures" includes 
measures of all kinds, legislative, adminis- 
trative, judicial or others, that have been 
taken or will be taken hereafter with regard 
to enemy property, and which have had or 
will have the effect of removing from the 
proprietors the power of disposition over 
their property, though without affecting the 
ownership, such as measures of supervision, 

239 



Economic Clauses 

of compulsory administration, and of se- 
questration: or measures which have had or 
will have as an object the seizure of, the 
use of, or the interference with enemy as- 
sets, for whatsoever motive, under whatso- 
ever form or in whatsoever place. Acts in 
the execution of these measures include all 
detentions, instructions, orders or decrees 
of Government departments or courts ap- 
plying these measures to enemy property, 
as well as acts performed by any person 
connected with the administration or the 
supervision of enemy property, such as the 
payment of debts, the collecting of credits, 
the payment of any costs, charges or ex- 
penses, or the collecting of fees. 

Measures of transfer are those which have 
affected or will affect the ownership of 
enemy property by transferring it in whole 
or in part to a person other than the enemy 
owner, and without his consent, such as 
measures directing the sale, liquidation, or 
devolution of ownership in enemy prop- 
erty, or the cancelling of titles or securities. 



classes of All property, rights and interests of Ger- 

claims for * * " ' c 

payment of mail nationals within the territory of any 

which Get- * 

mwKe? Allied or Associated Power aud the net pro- 
A«oci i a e t d ed nd ceeds of their sale, liquidation or other deal- 
pow ings therewith may be charged by that Al- 

lied or Associated Power in the first place 

240 



Economic Clauses 

with payment of amounts due in respect of 
claims by the nationals of that Allied or 
Associated Power with regard to their prop- 
erty, rights and interests, including com- 
panies and associations in which they are 
interested, in German territory, or debts 
owing to them by German nationals, and 
with payment of claims growing out of acts 
committed by the German Government or 
by any German authorities since July 31, 
1914, and before that Allied or Associated 
Power entered into the war. The amount 
of such claims may be assessed by an arbi- 
trator appointed by M. Gustave Ador, if 
he is willing, or if no such appointment is 
made by him, by an arbitrator appointed 
by the Mixed Arbitral Tribunal provided 
for in Section VI. They may be charged in 
the second place with payment of the 
amounts due in respect of claims by the 
nationals of such Allied or Associated 
Power with regard to their property, rights 
and interests in the territory of other enemy 
Powers, in so far as those claims are other- 
wise unsatisfied. 



provides pro- Notwithstanding the provisions of Ar- very special 

tection for » i. cage u s 

coloration ^' IC ^ Q ~^~> where immediately before the out- ^^ d not 

us°e™f u ite air break of war a company incorporated in an 

neuSai c n oun- Allied or Associated State had rights in 

eekurYofSe common with a company controlled by it 

241 



* ^ . ■ t 

- - 

..- .-. -.- a..-.- 



F. : :." ■:..■ '.'.' : >\ < 

s - ' 

5 

...... 

g \ 

. . . > 



Up s s 

. witli a 
(.ix is respons - N ■■ 

ests < 

s and ass in 

,.\ e b 
SUl I bj I - • U) 65 

9, 

i. 

^^ ' :\ o&6 jMtr faun the coming into 
force . esent Allied or As 



17 



Economic Clauses 

sociated rowers will specify the property, 
rights and Interest* over which they Intend 
i<> exercise the rights provided In Article 
ii!)7, paragraph (/). 

8. 

The restitution provided In Article 297 
will be carried out by order of the German 
Government or of the authorities which 
have been substituted Cor It. Detailed ac- 
counts of the action of administrators shall 
be furnished to the Interested persons by 
the German authorities upon request, which 
limy be made at any Mine after the coming 
info force of the present Treaty. 

0. 

Hniil completion of the Liquidation pro- onimo 

■ ■ effect in IT. 

vided for l»y Article -!)7, paragraph (b), B y.$ th0, j t 

•' 7 I " I / / nf | ( |,| long] 

the properly, rights and interests of Ger- ^JL^ 
man nationals will continue to be subject 

to exceptional War incisures that have been 

or will be taken with regard to them. 

10. 

Germany will, within six months from important 

olauie ( ai wb 

the coming Into force of the present Treaty, cannot adjuat 

o i " ' lerloui com- 

deliver tO each Allied or Associated Power pBcaflonj 

regarding 

all securities, certificates, deeds, or other Jgg^^* 
documents of title held by its nationals and f^,'"',!'!!,,, 
relating to property, rights or Interests sit- SS^S?. 
uated in the territory of that Allied or As- 

243 



- 
sts I 



- 
- 



I 

5 to the 1V\\. - 

i 
! 

12. 

ies 

wore into - :. by perst s res] 

Ml 



WCOtlOffUC Chin:,, 

Hi'- administration of enemy properties op 
Ing - ontro] over uuch administration, or 
b order of such persona or of any authority 
whatsoever shall be annulled. These cash 
b ( shall be accounted for Irrespective of 
any such Inv istment. 



I Mm I In 
rctiii ii '.r a i 



within one month from the coming into 
;;;;,";;,;;';;;.. force of i lie present Treaty, or on demand at 
'""•""""" any time, Germany will deliver to the A I 
lied and Associated Powers nil accounts, 
vouchers, records, documents and informa- 
tion of any kind which may be within Ger- 
man territory, and which concern the prop- 
erty, rights and Inti rests of the nationals 
of i iio.se row err, Including companies and 

ociations In which they are Interested, 
that have been subjected to an exceptional 
war measure, or to a measure of transfer 
either In German territory or In territory 
occupied by Germany or her allies. 

The controllers, supervisors, managers, 
adminisi rators, sequesl rators, liquidators 
and receivers shall be personally responsible 
\in<i(-r guarantee of the German Govern- 
ment for the Immediate delivery in full of 
these accounts and documents, and for their 
accuracy. 

M. 

"['[•'■ l The provisions <>r Article 2'M nn<l this foes., 

\ . . . Alien i'rr,p- 

'""'•" " Annex relating to property, rights and in- wtyouitc 

245 



Economic Clauses 

terests in an enemy country, and the pro- J ^ 

coeds of (he liquidation thereof, apply to i thu 
debts, credits and accounts, Section III 
regulating only the method of payment. 

In the settlement of matters provided for 
in Article 297 between Germany and tlie 
Allied or Associated States, their colonies 
protectorates, or any one of the British 
Dominions or India, in respect Of any of 
which a declaration shall not have been 
made that they adopt Section III. and be- 
tween their respective nationals, the pro- 
visions of Section 111 respecting the eur- 
rency in which payment is to bo made and 
the rate of exchange and of interest shall 
apply unless the Government of the Allied 
or Associated rower concerned shall within 
six months of the coming- into force of the 
present Treaty notify Germany that the 
said provisions are not to be applied. 

15. 

The provisions of Article 297 and this 
Annex, apply to industrial, literary and ar- 
tistic property which has been or will be 
dealt with in the liquidation of property, 
rights, interests, companies or businesses 
under war legislation by the Allied or Asso- 
dated Powers, or in accordance with the 
stipulations of Article 297, paragraph (b). 

?4G 



Economic Clauses 



Section V. 



CONTRACTS, PRESCRIPTIONS, JUDGMENTS. 



Article 290. 



Onrrnl dis- 
nolution "f 
nil pre \\;ir 
contracts, 
with certain 
exceptions. 



(a) Any contracts concluded between Art. 299 does 
enemies shall be regarded as having been u. s. (Se« 

paragraph 

dissolved as from the time when any two of (t)) 
the parlies became enemies, except in re- 
spect of any debt or other pecuniary obliga 
lion arising out of any act done or money 
paid thereunder, and subject to the excep- 
tions and special rules with regard to par- 
ticular contracts or classes of contracts 
contained herein or in the Annex hereto. 

( b ) Any contract of which the execution 
shall be required in the general interest, 
within six months from the dale of the com- 
ing into force of the present Treaty, by the 
Allied or Associated Governments of which 
one of the parties is a national, shall be ex- 
cepted from dissolution under this Article. 

When the execution of the contract thus 
kept alive would, owing to the alteration 
of trade conditions, cause one of the parties 
substantial prejudice the Mixed Arbitral 
Tribunal provided for by Section VI shall 
•be empowered to grant to the prejudiced 
party equitable compensation. 

247 



Economic Clauses 

(c) Having regard to the provisions of 
the constitution and law of the United 
States of America, of Brazil, and of Japan, 
neither the present Article, nor Article 300, 
nor the Annex hereto shall apply to con- 
tracts made between nationals of these 
States and German nationals; nor shall Ar- 
ticle 305 apply to the United States of 
America or its nationals. 

(d) The present Article and the Annex 
hereto shall not apply to contracts the 
parties to which became enemies by reason 
of one of them being an inhabitant of terri- 
tory of which the sovereignty has been 
transferred, if such party shall acquire un- 
der the present Treaty the nationality of 
an Allied or Associated Power, nor shall 
they apply to contracts between nationals 
of the Allied and Associated Powers be- 
tween whom trading has been prohibited by 
reason of one of the parties being in Allied 
or Associated territory in the occupation 
of the enemy. 

(e) Nothing in the present Article or the 
Annex hereto shall be deemed to invalidate 
a transaction lawfully carried out in ac- 
cordance with a contract between enemies 
if it has been carried out with the authority 
of one of the belligerent Powers. 

248 



Economic Clauses 
Article 300. 

2225* ( ft ) A11 Periods of prescription, or limi- ^oo,doe S 
Art. 299. tation of right of action, whether they be- £ J cla (See 
gan to rim before or after the outbreak of 299(c)) 
war, shall be treated in the territory of the 
High Contracting Parties, so far as regards 
relations between enemies, as having been 
suspended for the duration of the Avar. 
They shall begin to run again at earliest 
three months after the coming into force 
of the present Treaty. This provision shall 
apply to the period prescribed for the pres- 
entation of interest or dividend coupons 
or for the presentation for repayment of 
securities drawn for repayment or repay- 
able on any other ground. 

(b) Where, on account of failure to per- 
form any act or comply with any formality 
during the war, measures of execution have 
been taken in German territory to the prej- 
udice of a national of an Allied or Asso- 
ciated Power, the claim of such national 
shall, if the matter does not fall within the 
competence of the Courts of an Allied or As- 
sociated Power, be heard by the Mixed Ar- 
bitral Tribunal provided for by Section VI. 

'(c) Upon the application of any inter- 
ested person who is a national of an Allied 
or Associated Power the Mixed Arbitral 
Tribunal shall order the restoration of the 

249 



Economic Clauses 

rights which have been prejudiced by the 
measures of execution referred to in para- 
graph ! . wherever, having regard to the 

particular circumstances of the ease, such, 
restoration is equitable and possible. 

If such restoration is inequitable or im- 
possible the Mixed Arbitral Tribunal mar 
grant compensation to the prejudiced party 
to be paid by the German Government. 

((7) Where a contract between enemies 
has been dissolved by reason either of fail- 
ure on the part of either party to carry out 
its provisions or of The exercise of a right 
stipulated in the contract itself the party 
prejudiced may apply to the Mixed Arbitral 
Tribunal for relief. The Tribunal will have 
the powers provided for in paragraph (c). 

The provisions of the preceding para- 
graphs of this Article shall apply to the na- 
tionals of Allied and Associated Powers 
who have been prejudiced by reason of 
measures referred to above taken by Ger- 
many in invaded or occupied territory, if 
they have not been otherwise compensated. 

(/) Germany shall compensate any third 
party who may be prejudiced by any resti- 
tution or restoration ordered bv the Mixed 
Arbitral Tribunal under the provisions of 
the preceding paragraphs of this Article. 

(g) As regard** negotiable instruments, 
the period of three months provided under 

250 



Economic Clauses 

paragraph (a) shall commence as from the 
date on which any exceptional regulations 
applied in the territories of the interested 
Power with regard to negotiable instru- 
ments shall have definitely ceased to have 
force. 

Article 301. 



legotinble 
istrumenta 
ot rendered 
nalid for 
lilnre to 
resent them 
uring the 
*ur. 



Extension of 
ime provided 
or presenta- 
ion, ic. 



As between enemies no negotiable instru- Applies to 
incut made before the Avar shall be deemed 
to have "become invalid by reason only of 
failure within the required time to present 
the instrument for acceptance or payment 
or to give notice of non-acceptance or non- 
payment to drawers or indorscrs or to pro- 
test the instrument, nor by reason of failure 
to complete any formality during the war. 

Where tha period within which a negoti- 
able instrument should have been presented 
for acceptance or for payment, or within 
which notice of non-acceptance or non-pay- 
ment should have been given to the drawer 
or indorser, or within which the instrument 
should have been protested, has elapsed dur- 
ing the Avar, and the party AA r ho should have 
presented or protested the instrument or 
have given notice of non-acceptance or non- 
payment has failed to do so during the war, 
a period of not less than three months from 
the coming into force of the present Treaty 
shall be allowed within which presentation, 



251 



Economic Clauses 

notice of non-acceptance or non-payment or 
protest may be made. 



Article 302. 

SSo n f tscf Judgments given by the Courts of an Al- Applied 
provk3ed C for es lied or Associated Power in all cases which, 
shaii be Treaty under the present Treaty, they are conine- 

recognized i 

a S final. tent to decide, shall be recognised in Ger- 

many as final, and shall be enforced without 
it being necessary to have them declared 
executory. 

Remedy t/? -, . . 

against it a judgment in respect to any dispute 

judgments . . , _ »> r 

coSrtTXn lcn ma y nave ari »en has been given dur- 

a A nf Hfni" d ' ing tke war h J a Germ *n Court against a 

def 1 e e n t s°e make Dational of aa Allied or Associated State 

SSiSutai in a case in which ]ie was not able to make 

Tribunal^ his defence, the Allied and Associated na- 

suchcase. tional who hag suffered pre judice thereby 

shall be entitled to recover compensation, 

to be fixed by the Mixed Arbitral Tribunal 

provided for in Section VI. 

At the instance of the national of the 
Allied or Associated Power the compensa- 
tion above mentioned may, upon order to 
that effect of the Mixed Arbitral Tribunal, 
be effected where it is possible by replacing 
the parties in the situation which they oc- 
cupied before the judgment was given by 
the German Court. 

The above compensation may likewise be 
obtained before the Mixed Arbitral Tri- 

252 



Economic Glauses 

•bunal by the nationals of Allied or Associ- 
ated Powers who have suffered prejudice 
by judicial measures taken in invaded or 
occupied territories, if they have not been 
otherwise compensated. 

Article 303. 



Meaning of 
"during the 
war." 



For the purpose of Sections III, IV, V 
and VII, the expression "during the war" 
means for each Allied or Associated Power 
the period between the commencement of 
the state of war between that Power and 
Germany and the coming into force of the 
present Treaty. 



ANNEX. 



I. General Provisions. 



1. 



Details 
regarding 
contracts 
annulled by 
this treaty. 



Within the meaning of Articles 299, 300 dom not a P - 

° ' ply to U. S. 

and 301, the parties to a contract shall be 
regarded as enemies when trading between 
them shall have been prohibited by or other- 
wise become unlawful under laws, orders 
or regulations to which one of those parties 
was subject. They shall be deemed to have 
become enemies from the date when such 
trading was prohibited or otherwise became 
unlawful. 

253 



Economic Clauses 



2. 



The following classes of contracts arc ex- noes not ap - 

c ph to U. S. 

ecpted from dissolution by Article 299, and, 
without prejudice to the rights contained 
in Article 297 (b) of Section IV, remain in 
force subject to the application of domestic 
laws, orders or regulations made during the 
war by the Allied and Associated ToAvers 
and subject to the terms of the contracts : 

(a) Contracts having for their object the 
transfer of estates or of real or personal 
property where the property therein had 
passed or the object had been delivered be- 
fore the parties became enemies; 

(b) Leases and agreements for leases of 
land and houses; 

(c) Contracts of mortgage, pledge or 
lien; 

(d) Concessions concerning mines, quar- 
ries or deposits; 

(r) Contracts between individuals or 
companies and States, provinces, munici- 
palities, or other similar juridical persons 
charged with administrative functions, and 
concessions granted by States, provinces, 
municipalities, or other similar juridical 
persons charged with administrative func- 
tions. 

254 



Economic Clauses 

3. 

If the provisions of a contract are in part jjj^.s!" 
dissolved under Article 299, the remaining 
provisions of that contract shall, subject to 
the same application of domestic laws as is 
provided for in paragraph 2, continue in 
force if they are severable, but where they 
are not severable the contract shall be 
deemed to have been dissolved in its en- 
tirety. 

II. Provisions relating to certain classes of 

Contracts. 

Stock Exchange and Commercial Exchange "f^j^ 

Contracts. 

A. 

(a) Rules made during the war by any 
recognised Exchange or Commercial Asso- 
ciation providing for the closure of con- 
tracts entered into before the war by an 
enemy are confirmed by the High Contract- 
ing Parties, as also any action taken there- 
under, provided: 

(1) That the contract was expressed to 
be made subject to the rules of the Ex- 
change or Association in question; 

(2) That the rules applied to all persons 
concerned; 

255 



Economic Clauses 

(3) That the conditions attaching to the 
closure were fair and reasonable. 

(6) The preceding paragraph shall not 
apply to rules made during the occupation 
1>t Exchanges or Commercial Associations 
in the districts occupied by the enemy. 

(c) The closure of contracts relating to 
cotton "futures." which were closed as on 
July 31, 1914. tinder the decision of the 
Liverpool Cotton Assoc ia lion, is also con- 
firmed. 

Security. 

5. 

The sale of a security held for an unpaid Doesnotap. 

1 ply to I . S. 

debt owing bv an enemv shall he deemed to 
have been valid irrespective of notice to the 
owner if the creditor acted in good faith and 
with reasonable rare and prudence, and no 
claim by the debtor on the ground of such 
sale •shall be admitted. 

This stipulation shall not apply to any 
sale of securities effected bv an enemy dur- 
ing the occupation in regions invaded or 
occupied by the enemy. 

Negotiable Instruments. 

6. 

As regards Powers which adopt Section r>oeanota P - 

° r plv to L T . S. 

Ill and the Annex thereto the pecuniary 

256 



Economic Clauses 

obligations existing between enemies and re- 
sulting from the issue of negotiable instru- 
ments shall be adjusted in conformity with. 
the said Annex by the instrumentality of 
the Clearing- Offices, which shall assume the 
rights of the holder as regards the various 
remedies open to him. 



If a person has either before or during pfy 9 t ou. a s." 
the war become liable upon a negotiable in- 
strument in accordance with an undertaking 
given to him by a person who has subse- 
quently become an enemy, the latter shall 
remain liable to indemnify the former in 
respect of his liability notwithstanding the 
outbreak of war. 

III. Contracts of Insurance. 

8. 

Contracts of insurance entered into by J^u.!?* 
any person with another person who subse- 
quently became an enemy will be dealt with 
in accordance with the following para- 
graphs. 

Fire Insurance. 

9. 

Contracts for the insurance of property p iy S to°u a s. 
against fire entered into by a person inter- 

257 



Economic Clauses 

ested in such property with another person 
who subsequently became an enemy shall not 
be deemed to have been dissolved by the 
outbreak of war, or by the fact of the person 
becoming an enemy, or on account of the 
failure during the war and for a period of 
three months thereafter to perform his obli- 
gations under the contract, but they shall 
be dissolved at the date when the annual 
premium becomes- payable for the first time 
after the expiration of a period of three 
months after the coming into force of the 
present Treaty. 

A settlement shall be effected of unpaid 
premiums which became due during the 
war, or of claims for losses which occurred 
during the war. 



10. 



Where by administrative or legislative ac- p^tor.s! 
tion an insurance against tire effected before 
the war has been transferred during the war 
from the original to another insurer, the 
transfer will be recognised and the liability 
of the original insurer will be deemed to 
have ceased as from the date of the transfer. 
The original insurer will, however, be en- 
titled to receive on demand full information 
as to the terms of the transfer, and if it 
should appear that these terms were not 

258 



18 



Economic Clauses 

equitable they shall be amended so far as 
may be necessary to render them equitable. 
Furthermore, the insured shall, subject to 
the concurrence of the original insurer, be 
entitled to retransfer the contract to the 
original insurer as from the date of the 
demand. 

Life Insurance. 

11. 

Contracts of life insurance entered into _ a , 

Does not ap- 

between an insurer and a person who subse- p^^u. s. 
quently became an enemy shall not be 
deemed to have been dissolved by the out- 
break of war, or by the fact of the person 
becoming an enemy. 

Any sum which during the war became 
due upon a contract deemed not to have 
been dissolved under the preceding pro- 
vision shall be recoverable after the war 
with the addition of interest at five per 
cent, per annum from the date of its becom- 
ing due up to the day of payment. 

Where, the contract has lapsed during the 
war owing to non-payment of premiums, or 
has become void from breach of the condi- 
tions of the contract, the assured or his 
representatives or the person entitled shall 
have the right at anv time within twelve 
months of the coming into force of the pres- 
ent Treaty to claim from the insurer the 

259 



Economic Clauses 

surrender value of the policy at the date of 
its lapse or avoidance. 

Where the contract has lapsed during the 
war owing to non-payment of premiums the 
payment of which has been prevented by the 
enforcement of measures of war, the assured 
or his representative or the persons entitled 
shall have the right to restore the contract 
on payment of the premiums with interest 
at five per cent, per annum within three 
months from the coming into force of the 
present Treaty. 



12. 



ply to U. S. 






Any Allied or Associated Power may D , oe ! n ?* a ,p- 

* * nlv to II- S. 

within three months of the coining into force 
of the present Treaty cancel all the con- 
tracts of insurance running between a Ger- 
man insurance company and its nationals 
under conditions which shall protect its na- 
tionals from any prejudice. 

To this end the German insurance com- 
pany will hand over to the Allied or Asso- 
ciated Government concerned the proportion 
of its assets attributable to the policies so 
cancelled and will be relieved from all lia- 
bility in respect of such policies. The assets 
to be handed over shall be determined by an 
actuary appointed by the Mixed Arbitral 
Tribunal. 

260 



Economic Clauses 
13. 

Where contracts of life insurance have j^to'u.T 
been entered into by a local branch of an 
insurance company established in a country 
which subsequently became an enemy coun- 
try, the contract shall, in the absence of 
any stipulation to the contrary in the con- 
tract itself, be governed by the local law, 
but the insurer shall be entitled to demand 
from the insured or his representatives the 
refund of sums paid on claims made or en- 
forced under measures taken during the 
war, if the making or enforcement of such 
claims was not in accordance with the 
terms of the contract itself or was not con- 
sistent with the laws or treaties existing at 
the time when it was entered into. 

14. 

In any case where by the law applicable [£? s to n u. a <r 
to the contract the insurer remains bound 
by the contract notwithstanding the non- 
payment of premiums until notice is given 
to the insured of the termination of the 
contract, he shall be entitled where the giv- 
ing of such notice was prevented by the war 
to recover the unpaid premiums with inter- 
est at five per cent, per annum from the 
insured. 

15. 

Insurance contracts shall be considered J^Ju.sT 
as contracts of life assurance for the pur- 

261 



Economic Clauses 

pose of paragraphs 11 to 11 when they de- 
pend on the probabilities of human life com- 
bined with the rate of interest for the cal- 
culation of the reciprocal engagements be- 
tween the two parties. 

Marine Insurance. 

16. 
Contracts of marine insurance including Does not «J 

' i>lv to U. S. 

time policies and voyage policies entered 
into between an insurer and a person who 
subsequently became an enemy, shall be 

deemed to have been dissolved on his becom- 
ing- an enemy, except in cases where the risk 
undertaken in the contract had attached be- 
fore he became an enemy. 

Where the risk had not attached, money 
paid by way of premium or otherwise shall 
be recoverable from the insurer. 

Where the risk had attached effect shall 
be given to the contract notwithstanding 
the party becoming an enemy, and sums due 
under the contract either by way of pre- 
miums or in respect of losses shall be re- 
coverable after the coming into force of the 
present Treaty. 

In the event of any agreement being come 
to for the payment of interest on •sums due 
before the war to or bv the nationals of 
States which have been at war and recov- 
ered after the war, such interest shall in 

262 



Economic Clauses 

the case of losses recoverable under con- 
tracts of marine insurance run from the ex- 
piration of a period of one year from the 
date of the loss. 



17. 



No contract of marine insurance with an P°esnota P . 

ply to U. S. 

insured person who subsequently became an 
enemy shall be deemed to cover losses due 
to belligerent action by the Tower of which 
the insurer was a national or by the allies 
or associates of such Power. 



18. 



Where it is shown that a person who had docs not ap - 

1 ply to U. S. 

before the war entered into a contract of 
marine insurance with an insurer who sub- 
sequently became an enemy entered after 
the outbreak of war into a new contract 
covering the same risk with an insurer who 
was not an enemy, the new contract shall 
be deemed to be substituted for the original 
contract as from the date when it was en- 
tered into, and the premiums payable shall 
be adjusted on the basis of the original in- 
surer having remained liable on the con- 
tract only up till the time when the new 
contract was entered into. 

263 



I " . . - s 

Insurm «, 

19. 
of insurance entered into be- ■ »■ 

a 

b :' e war between an insurer and a per- 
son who subsequently became an enemy, 

er than conti s dealt with in pai 

phs 9 to IS. shall be treated in all i 
spe< - a the same : g as contracts of 

• insurance the same persons 

would bo dealt with under the said para- 
graphs. 

AY ' v 

20. 

All treaties of re-insurance with a person r ■'•"' .. 
who became an enemy shall be regarded as 
having boon abrogated by the person becom- 
ing an enemy, bar without prejudice In the 

se of life or marine risks which had at- 
tached before the war to the right to recover 
payment after the war for sums due in re- 
spect of such risks. 

Nevertheless if, owing to invasion, it has 
been impossible for the re-insured to find 
another re-insnrer, the treaty shall remain 
in force until three months after the com- 
ing into force of the present Treaty. 

Where a re-insurance treaty becomes void 
under this paragraph, there shall bo an ad* 

264 



Economic Clauses 

justment of accounts between the parties in 
respect both of premiums paid and payable 
and of liabilities for losses In respect of 
life or marine risks which had attached be- 
fore the war. In the case Of risks other 
than those mentioned in paragraphs ll to 
is I in- adjustment of accounts shall be made 
as at the date of the parties becoming 
enemies without regard to claims for losses 
which may have occurred since that date. 

21. 

The provisions of the preceding para- ^7" "a. IT 
graph will extend equally to re-insurances 
existing at the date of the parties becoming 
enemies of particular risks undertaken by 
the insurer in a contract of insurance 
against any risks other than life or marine 
risks. 

22. 
Re-insurance of life risks effected l>v par- ,) 1 * ,p ? n ?J " p_ 

*> k ply to U. 8. 

ticular contracts ami not under any general 
treaty remain in force. 

The provisions of paragraph 12 apply to 
treaties of re-insurance of life insurance 
contracts in which enemy companies are 
the re-insurers. 

23. 

In ease of a re-insurance effected before D 1 00 !! n ? T t T 

ply to U. 8. 

the war of a contract of marine insurance, 

265 



Bctmo ' - s 

the 96 risk which had boon ceded 

shall, if it had attached bo- 
war, ivr. alid and 

stand- 
u g the on; k of war; sums due under 
the contract of re-insurance in resp< 

or of premiums or of losses shall 
coverable after the war, 

24. 

_• apha 17 and 18 fg* 
he last part of paragraph 16 shall 
apply to - . re-insurance of 

marine risks, 

Sbohon VT, 

MIXK RIBUNAL. 

A . 4, 



(«) Within throe months from the date J \ 
of the coming into e of the present 

.'■ ..:y. a Mixed Arbitral Tribunal shall be 
es ablished between each Allied and 

Associated Powers on the one hand and 
Germany on the other hand. ich such 
Tribunal shall cons ' three members. 
Each of the Governments concerned shall 
appoint one of those members. The Presi- 
dent shall be chosen by agreement between 
the two Governments concerned. 

266 



Economic Clauses 

in case of failure to reach agreement, the 
President of Mm-. Tribunal and two other 
persons either of whom may Ln case of need 
take his place, siuill be chosen by the Coun- 
cil of the League of Nations, or, until dim 
is set up, by M. Gustave Ador if he is will- ffc*j£Jt 
in--. These persons shall he aationals of 228 S?* 
Powers that have remained ueutral during public, 
the war. 

I r any ( l-overnment does not proceed with- 
in a period of one month in case there is a 
vacancy to appoinl a member of lh<* Tri- 
bunal, such member shall be chosen by the 
other Governmenl from the two persons 
mentioned above other than the President. 

The decision of the majority of the mem- 
bers of the Tribunal shall be the decision 

Of ( lie Tribunal. 

juHidirtion (/> ) T | 1( , Mixed Arbitral Tribunals es- 
wbunii. tablished pursuant to paragraph (a), shall 
decide all questions within their compe- 
tence under Sections III, [V, V and VII. 

In addition, all questions, whatsoever 
their nature, relating to contracts con- 
cluded before the coming into force of 
the present Treaty between nationals 
Of the Allied and Associated Powers and 
German nationals shall be decided by 
the Mixed Arbitral Tribunal, always ex- 
cepting questions which, under the laws of 
the Allied, Associated or Neutral Powers, 
are within the jurisdiction of the National 

2G7 



Economic Clauses 

Courts of those Powers. Such questions 
shall Ik- decided by the National Courts in 
question, to the exclusion of the Mixed Ar- 
bitral Tribunal. The party who is a na- 
tional of an Allied or Associated Power 
may nevertheless bring the case before the 
Mixed Arbitral Tribunal if this is not pro- 
hibited by the laws of his country. 

(c) If the number of cases justifies it, ad- 
ditional members shall be appointed and 
each Mixed Arbitral Tribunal shall sit in 
divisions. Each of these divisions will be 
constituted as above. 

(d) Each Mixed Arbitral Tribunal will 
settle its own procedure except in so far as 
it is provided in the following Annex, and 
is empowered to award the sums to be paid 
by the loser in respect of the costs and ex- 
penses of the proceedings. 

(e) Each Government will pay the re- 
muneration of the member of the Mixed 
Arbitral Tribunal appointed by it and of 
any agent whom it may appoint to represent 
it before the Tribunal. The remuneration 
of the President will be determined by spe- 
cial agreement between the Governments 
concerned; and this remuneration and the 
joint expenses of each Tribunal will be 
paid by the two Governments in equal 
moieties. 

2G8 



Economic Clauses 

(/) The High Contracting Parties agree 
that their courts and authorities shall ren- 
der to the Mixed Arbitral Tribunals direct 
all the assistance in their power, particu- 
larly as regards transmitting notices and 
collecting evidence. 

((/) Tlie High Contracting Parties agree 
to regard the decisions of the Mixed Arbi- 
tral Tribunal as final and conclusive, and 
to render them binding upon their nationals. 

ANNEX. 

1. 

Should one of the members of the Tri- 
bunal either die, retire, or be unable for any 
reason whatever to discharge his function, 
the same procedure will be followed for fill- 
ing the vacancy as was followed for ap- 
pointing him. 

2. 

The Tribunal may adopt such rules of 
X»rocedure as shall be in accordance with 
justice and equity and decide the order and 
time at which each party must conclude its 
arguments, and may arrange all formalities 
required for dealing with the evidence. 

3. 

The agent and counsel of the parties on 
each side are authorised to present orally 

2G9 



Economic Clauses 

and in writing to the Tribunal arguments 
in support or in defence of each case. 

4. 

The Tribunal shall keep record of the 
questions and cases submitted and the pro- 
ceedings thereon, with the dates of such 
proceedings. 

5. 

Each of the Powers concerned may ap- 
point a secretary. These secretaries shall 
act together as joint secretaries of the Tri- 
bunal and shall be subject to its direction. 
The Tribunal may appoint and employ any 
other necessary officer or officers to assist in 
the performance of its duties. 

6. 

The Tribunal shall decide all questions 
and matters submitted upon such evidence 
and information as may be furnished by the 
parties concerned. 

7. 

German}' agrees to give the Tribunal all 
facilities and information required by it for 
carrying out its investigations. 

8. 

The language in which the proceedings 
shall be conducted shall, unless otherwise 



07 







Economic Clauses 

agreed, be English, French, Italian or 
Japanese, as may be determined by the Al- 
lied or Associated Power concerned. 

9. 

The place and time for the meetings of 
each Tribunal shall be determined by the 
President of the Tribunal. 

Article 305. 

Whenever a competent court has given [g«°»"£- 
or gives a decision in a case covered by Sec- gox^?*" 
tions III, IV, V or VII, and such decision 
is inconsistent with the provisions of such 
Sections, the party who is prejudiced by 
the decision shall be entitled to obtain re- 
dress which shall be fixed by the Mixed Ar- 
bitral Tribunal. At the request of the na- 
tional of an Allied or Associated Power, the 
redress may, whenever possible, be effected 
by the Mixed Arbitral Tribunal directing 
the replacement of the parties in the posi- 
tion occupied by them before the judgment 
w r as given by the German court. 

Section VII. 

INDUSTRIAL PROPERTY. 

Article 30G. 

Restoration 

Re-^tab- Subject to the stipulations of the present j^S? 



lishes indus- 



trial property Treaty, rights of industrial, literary and ar- ^^ 

rights in " ' ° 6 i.iauo«. 

271 



Economic Clauses 



favor of per- 
sona entitled 
thereto when 
War com- 
menced. 



Provides for 
recognition 

of rights 
which, ex 

for the War, 
would have 
been acquired, 
in consequence 
of an applica- 
tion for pro- 
toot ion of 
industrial 
property. 



Acta of Allies 
under special 
War Meas- 
ures to 
remain valid 
and effective. 



tistic property, as such property is defined 
by the International Conventions of Faris 
and of Berne, mentioned in Article 286, 
shall be re-established or restored, as from 
the coming into forte of the present Treaty, 
in the territories of the High Contracting 
Parties, in favour of the persons entitled to 
the benefit of them at the moment when 
the state of Avar commenced or their legal 
representatives. Equally, rights which, 
except tor the war, would have been ac- 
quired during the war in consequence of 
an application made for the protection of 
industrial property, or the publication of 
a literary or artistic work, shall be recog- 
nised and established in favour of those per- 
sons who would have been entitled thereto, 
from the coming into force of the present 
Treaty. 

Nevertheless, all acts done by virtue of 
the special measures taken during the war 
under legislative, executive or administra- 
tive authoritv of any Allied or Associated 
Tower in regard to the rights of German 
nationals in industrial, literary or artistic 
property shall remain in force and shall 
continue to maintain their full effect. 



Xo claim shall be made or action brought 



Allied Gov- 
ernments and 

SeTr^eTau by Germany or German nationals in re- 
ciaimafornse spect of the use during the war by the Gov- 
industri'a" emmeiit of any Allied or Associated Power, 
during the or by any persons acting on behalf or with 



272 



Economic Clauses 



Sums duo or 
paid under 
(Special War 
Measures of 
Alliesto be 
treated in 
same manner 
as other sums 



war; also ^he assen t, of such Government, of any 

from claims ' * 

use thereafter rights in industrial, literary or artistic 

products!" 3 property, nor in respect of the sale, offering 

for sale, or use of any products, articles or 

apparatus whatsoever to which such rights 

applied. 

Unless the legislation of any one of the 
Allied or Associated Powers in force at the 
moment of the signature of the present 
Treaty otherwise directs, sums due or paid 

due to German 

nationals j n virtue of anv act or operation resulting 

Sums produced " L 

by special war f r0 m the executiou of the special measures 

Measures of r 

{JSSSdta mentioned in paragraph I of this Article 
other debtf shall be dealt with in the same way as other 
national sums due to German nationals are directed 
to be dealt with by the present Treaty ; and 
sums produced by any special measures 1 
taken by the German Government in respect 
of rights in industrial, literary or artistic 
property belonging to the nationals of the 
Allied or Associated Powers shall be con- 
sidered and treated in the same way as 
other debts due from German nationals. 



Allies reserve 
right after 
War to impose 
restrictions 
on German 
Industrial 
Property in 
publio 
interest, or 
for national 
defense. 



Each of the Allied and Associated Powers 
reserves to itself the right to impose such, 
limitations, conditions or restrictions on 
rights of industrial, literary or artistic 
property (with the exception of trade- 
marks) acquired before or during the war, 
or which may be subsequently acquired in 
accordance with its legislation, by German 
nationals, whether by granting licenses, or 



273 



/' onomic Ctous - 



In thp event 
I 

reasonable 
indemnities 

will be paid. 



"by the working, or by preserving control 
over their exploitation, or in any other way. 
as may be considered necessary for national 
defence, or in the pnblic interest, or for 
assuring the fair treatment by Germany of 
the rights of industrial, literary and artist ie 
property held in German territory by its 
nationals, or for securing the due fulfilment 
of all the obligations undertaken by Ger- 

« 

many in the present Treaty. As regards 
rights of industrial, literary and artistic 
property acquired after the coming into 
force of the present Treaty, the right so re- 
served by the Allied ami Associated Powers 
shall only be exercised in eases where these 
limitations, conditions or restrictions may 
be considered neeessarv for national defence 
or in the public interest. 

Iu the event of the application of the pro- 
visions of the preceding paragraph by any 

Allied or Associated Power, there shall bo 
paid reasonable indemnities or royalties, 
which shall be dealt with in the same way 
as other sums due to German nationals are 
directed io be dealt with by the present 
Treat v. 



Each of the Allied or Associated Powers JJ5UJS 



v .ir or there* 
- m.iy be 
treated by 
Allies .is void 
if th 

result in de- 
feating 

of this Article. $p tV f of industrial, literary or artistic prop 



reserves the right to treat as void and of 
no effect any transfer in whole or in part o( 
ov other dealing with rights of or in re- 



fraudulent 

transfers- to 
neutrals. 



crty effeeted after August 1. 1014, or in the 

271 



Economic Clauses 

future, which would have the result of de- 
feating the objects of the provisions of this 
Article. 
pn!porty a lhich r - rne provisions of this Article shall not 
In'V'uMirait apply to rights in industrial, literary or 
War legislation art ts1 i<* property which have been dealt with 
liquidation of in the liquidation of business or companies 
■ubjectto under war legislation bv the Allied or As- 

provisions of 

this Article, sociated Powers, or which may be so dealt 
with by virtue of Article 297, para- 
graph (&). 



Article 307. 

Jne'^pro. A minimum of one year after the coming jgJSjJ/ 11 

iuu*:i!! hm into force of the present Treaty shall be ac- gjg^ 

obVfitf.mpro- corded to the nationals of the Iligh Con- jUSSfngs. 
orreguktiona tracting Parties, without extension fees or 

relating to in- 
dustrial prop- other penalty, in order to enable such per- 

erty acquired 

before Aug. i, sons to accomplish any act, fulfil any 

1014, or which x* i7 «/ 

SSacqufred formality, pay any fees, and generally satis- 
w! 1 r r i 'fmrn e an f.v any obligation prescribed by the laws or 
Sade'before regulations of the respective States relating 

or during j , i i i • ' • » 

thowar. to the obtaining, preserving, or opposing 
rights to, or in respect of, industrial prop- 
erty either acquired before August 1, 1914, 
or which, except for the war, might have 
been acquired since that date as a result of 
an application made before the war or dur- 
ing its continuance, but nothing in this Ar- 
ticle shall give any right to reopen inter- 
ference proceedings in the United States of 

19 275 



Economic Clauses 



All lapsed 
- 

rtjr rights 
revi\ 

I tents 
and i 

D of 

Allies to pro- 
tect interi 
nannfac- 

ture ana . 



No rights 

lost tor 
failure to 

: d-.ir- 
ir\£r the War, 
nor for two 
- there- 
after. 



America where a liual hearing lias taken 
place. 

All rights in. or in respect of. such prop- 
erty which may have lapsed by reason of anv 
failure to accomplish any act> fulfil any for- 
mality, or make any payment, shall revive, 
but subject in the case of patents ami de- 
signs to the imposition of such conditions 
as each Allied or Associated Power may 
deem reasonably necessary i'ov the protec- 
tion of persons who have manufactured or 
made use of the subject matter of such prop- 
erty while the rights had lapsed. Further, 
where rights to patents or designs belonging 
to German nationals are revived under this 
Article, they shall be subject in respect of 
the grant of licenses to the same provisions 
as would have been applicable to them dur- 
ing- the war. as well as to all the provisions 
of the present Treaty. 

The period from August 1. 1014. until the 
coming into force of the present Treaty shall 
be excluded in considering the time within 
which a patent should be worked or a trade- 
mark or design used, and it is further agreed 
that no patent, registered trade-mark or de- 
sign in force on August 1, 1914, shall be sub- 
ject to revocation or cancellation by reason 
only of the failure to work such patent ov 
use such trade-mark or design for two years 
after the coming into force of the present 
Treaty. 

276 



When tVrman 
patent r.chts 
re\ '.% a th< y 
are subje< . 
Mm* lk\ 
proris 
appli< 

.: the 
Wax, and 
all the pro- 
visions of 
this l're.nv. 



Applies 
equally to all 
tries. 



Economic Clauses 
Article 308. 

SEES*. T,,,> ri S htfl ° r Priority, provided by Arti- jg%2£* 

; i :;;; i ;; l l l l ;,; l , ,;i1 cle4 of the International Convention for the i " tcrsc - 

Sjw d a ?and r ' Protection of [ndustrial Property of Paris, 

«,x m<.nti, s (>f -\ j - , , - 4 - 1 , 20, 1883, revised at Washington in 

L93 1 or by any oilier Convention or Statute, 
for the filing or registration of applications 
for patents or models of utility, and for the 
registration of trade-marks, designs and 
models which liad not expired on August 1, 
L914, and those which have arisen during 
the war, or would have arisen but for the 
Avar, shall be extended by each of the High 
Contracting Parlies in favour of all na- 
tionals of the other High Contracting Par- 
lies for a pei'iod of six months after the com* 
ing into force of the present Treaty. 
•nbraSflda 1 Nevertheless, such extension shall in no 
S5JIK-' way a ffect the right of any of I he 1 1 Lgh Con- 
tracting Parties or of any person who be- 
fore the coming into force of the present 
Treaty was bona fide in possession of any 
rights of industrial property conflicting 
with rights applied for by another who 
claims rights of priority in respect of them, 
to exercise such rights by itself or himself 
personally, or by such agents or licensees as 
derived their rights from it or him before 
the coming into force of the present Treaty; 
and such persons shall not be amenable to 
any act ion or other process of law in respect 
of infringement. 

277 



vening rights. 



Economic- Clauses 

Article 309. 
cancels an Xo action sliall be brought and no claim 5J!?2?S? 

rights to sue ° aoea not ap- 

men^com- 6 ' made b 3 r persons residing or carrying on g^g^ 
thewar during business within the territories of Germany P" aBraph -> 
on the one part and of the Allied or Associ- 
ated Powers on the other, or persons who are 
nationals of such Powers respectively, or by 
any one deriving title during the war from 
such persons, by reason of any action which 
has taken place within the territory of the 
other party between the date of the declara- 
tion of war and that of the coming into 
force of the present Treaty, which might con- 
stitute an infringement of the rights of in- 
dustrial property or rights of literary and 
artistic property, either existing at any time 
during the war or revived under the provi- 
sions of Articles 307 and 308. 
StoS Equally, no action for infringement of in- 

articS"? 8 dustrial, literary or artistic property rights 
afte/fhewarf'by such persons sliall at any time be permis- 
sible in respect of the sale or offering for 
sale for a period of one year after the signa- 
ture of the present Treaty in the territories 
of the Allied or Associated Powers on the 
one hand or Germany on the other, of prod- 
ucts or articles manufactured, or of literary 
or artistic works published, during the 
period between the declaration of war and 
the signature of the present Treaty, or 
against those who have acquired and con- 

278 



Economic Clauses 

tinue to use them. It is understood, never- 
SeTndtappiy theless, that this provision shall not apply 
oSwfwar" when the possessor of the rights was domi- 
inZ^inesTin ciled or had an industrial or commercial es- 

districts occu~ 

i»i e ,i by Ger- tablishment in the districts occupied by Ger- 

raany during 

the war. many during the war. 

This Article shall not apply as between 
the United States of America on the one 
hand and Germany on the other. 



Article 310. 

P C rt n wa1 a11 Licenses in respect of industrial, literary TolsnotV- 

Licenfea may or artistic property concluded before the war a/aii° ('see 

be renewed , ,. , - ,, A11 . -i A _• closing pars- 

on conditions between nationals of the Allied or Associ- graph.) 

tiibunai of ated Powers or persons residing in their ter- 

country where 

the rights ritory or carrying on business therein, on 

licensed orig- " " ° ' 

whenVights ept the one P art > ail( * German nationals, on the 
SSSSfto other part, shall be considered as cancelled 
mS Arbitral as f rom the date of the declaration of war 
renewal between Germany and the Allied or Associ- 
ated Powers. But, in any case, the former 
beneficiary of a contract of this kind shall 
have the right, within a period of six months 
after the coming into force of the present 
Treaty, to demand from the proprietor of 
the rights the grant of a new license, the 
conditions of which, in default of agreement 
between the parties, shall be fixed by the 
duly qualified tribunal in the country under 
whose legislation the rights had been ac- 
quired, except in the case of licenses held 

279 



ghts aired under Gern 
l.-.- s ses s shall 
\ '. s I . \ nal re- 
nted to in & Yin hfe P 

, ' . :viVv. •.•..-.' ■ •■..-. v. if necessary, .'.\ also Che 

. '. " amount just shooJ 

son use s dur* 



■ 



.... * :..-.. 



: 



No Be nse •■ • sped of industrial, Liter* 

.-.• - property, granted under the 

... 



s] ecial war lejjis \ " 

Associated Powt r, s pd by the 

nued exis license outr 

into befc shall remain valid 

and of fall se so gran 
to the former 1 

int re the w • shall inside] 

eul - toil for such license. 



Where sums hare boon paid di the 

~ ■" war bv virtueof alicens ment con- 

* 

ef ore the war in respect of rights 
in lustrial property or for tho roprodnotion 
or the representation o rarv. dramatic 

or .:: tistic woi fas, ' - sums si be dealt 
with in the same manner as other debts or 
credits of German nai '.<. as provided 
by the present Tret 

This Article shall nor apply as between 
the United States of America on ww 
hand and Germany on the o 



2S0 



Eoonomio Clauses 
Abtiold ."»i i. 



pM-man The in h;i Ml ;i n is of territories separated 

>' ;'/ "i' hl ' from German? by virhic of lh< 1 present, 

owned i >.v • ' 

::;';:';;!;;;,'" Treaty shall, notwithstanding this separa- 

fromOennanj ''°" :IIH ' ""* Change <>l" n;i I ioiin I il,y COUSe- 

ylxuiln " quent I hereon, conl inue lo enjoy in < Germany 

Germany. ■ ■ , ■ . . , . , , . • , • , • 

nil the rights in Industrial, literary and ar- 
tistic property l<> which they were entitled 
under German Legislation at the time of tliu 
separal Ion. 
Buofa induitriaj Rights of Industrial, literary and artistic 
;!' ;',!!,;;! ;',;;„. property which are In force In the territor- 

Mini i .111:1 in in . - .. , 1 i 1 

roroeintha les separated Prom Germany underthe pros- 

Hinin in which , ... , ... , ,• j 1 i • 

thottrritory ent Treaty at the iiioincn i, (»i the separation 

in IiiuiiiIci nil. 

oi these territories from Germany, or which 
will be re-established <n- restored in accord- 
ance with the provisions of Article •'!<><> of 
the present Treaty, shall be recognised by 
the State <«> which the said territory is trans- 
ferred and shall remain in lone in that 
territory for the same period of time given 
them under the German law. 



281 



Economic Clauses 

[Note — The following articles wore among 
the Economic Clauses originally drafted, 
but they were transferred.] 

PORTS, WATERWAYS AND 
RAILWAYS, 

Section I. 

general provisions, 

Article 323. 

Germany undertakes to make no discrimi- 
nation or preference, direct or indirect, in 
the duties, charges and prohibitions relating 
to importations into or exportations from 
her territories, or, subject to the special en- 
gagements contained in the present Treaty, 
in the charges and conditions of transport 
of goods or persons entering or leaving her 
territories, based on the frontier crossed; 
or on the kind, ownership or flag of the 
means of transport (including aircraft ) em- 
ployed; or on the original or immediate 
place of departure of the vessel, wagon or 
aircraft or other means o\' transport em- 
ployed, or its ultimate or intermediate desti- 
nation; or on the route of or places of trans- 
shipment on the journey: or on whether 
any port through which the goods are im- 
ported or exported is a German port or a 
port belonging to any foreign country or on 
whether the goods arc imported or exported 
by sea. by land or by air, 

009 

MM 



Economic Glauses 

Germany particularly undertakes not to 
establish against the ports and vessels of 
any of the Allied and Associated Powers 
any surtax or any direct or indirect bounty 
for export or import by German ports or 
vessels, or by those of another Power, for 
example by means of combined tariffs. She 
further undertakes that persons or goods 
passing through a port or using a vessel of 
any of the Allied and Associated Powers 
shall not be subjected to any formality or 
delay whatever to which such persons or 
goods would not be subjected if they passed 
through a German port or a port of any 
other Power, or used a German vessel or a 
vessel of any other Power. 

Section II. 

NAVIGATION. 

Chapter I. 

freedom op navigation. 

Article 327. 

ffiS w The nationals of any of the Allied and As- ™^r j:,f 
tvelZL in sociated Powers as well as their vessels and SJSSS 
Germany. proper tj shall enjoy iii all German ports S*S&? 
and on the inland navigation routes of Ger- Aiiies°as U< 

11 i • n i grant reci- 

many the same treatment in all respects as procity; sub- 
ject, however , 

German nationals, vessels and property. to revision 

by League 

In particular the vessels of any one of Sjjjgljgj, 
the Allied or Associated Powers shall be 378.) 

283 



Economic Clauses 

entitled to transport goods of any descrip- 
tion, and passengers, to or from any ports 
or places in German territory to which Ger- 
man vessels may have access, under condi- 
tions which shall not be more onerous than 
those applied In the case of national ves- 
sels; they shall be treated on a footing of 
equality with national vessels as regards 
port and harbour facilities and charges of 
every description, including facilities for 
stationing, loading and unloading, and du- 
ties and charges of tonnage, harbour, pilot- 
age, lighthouse, quarantine, and all analo- 
gous duties and charges o( whatsoever na- 
ture, levied in the name of or for the profit 
of the Government, public functionaries, 
private individuals, corporations or estab- 
lishments of any kind. 

Tn the event of Germany granting a pref- 
erential regime to any of the Allied or Asso- 
ciated Powers or to any other foreign 
Tower, this regime shall In 1 extended imme- 
diately and unconditionally to all the Allied 
and Associated Powers. 

There shall be no impediment to the move- 
ment of persons or vessels other than those 
arising from prescriptions concerning cus- 
toms, police, sanitation, emigration and im- 
migration, and those relating- to the im- 
port and export of prohibited goods. Such 
regulations must be reasonable and uniform 
and must not impede traffic unnecessarily. 

2Si 



Economic Clauses 

Chapter II. 

free zones in torts. 

Article 328. 

The free zones* existing in German ports 
on August 1, 1914, shall be maintained. 
These tree zones, and any oilier free zones 
which may be established in German terri- 
tory by the present Treaty, shall be sub- 
ject to the regime provided for in the fol- 
lowing Articles. 

Goods entering or leaving a free zone 
shall not be subjected to any import or ex- 
port duty, other than those provided for in 
Article 330. 

Vessels and goods entering a free zone 
may be subjected to the charges established 
to cover expenses of administration, upkeep 
and improvement of the port, as well as to 
the charges for the use of various installa- 
tions, provided that these charges shall be 
reasonable having regard to the expendi- 
ture incurred, and shall be levied in the 
conditions of equality provided for in Ar- 
ticle 327. 



ADDENDA 



ADDENDA. 

TTTE PRINCIPLE'S OF REPARATION. 

Address on Behalf of the American Delegates 

By John Foster Dulles, Esq., on 

February 13, 1919. 

Mr. President: 

It was a matter of considerable chagrin to the 
American members of this commission when it 
developed, upon an analysis of the various memo- 
randa on principles of reparation, that the memo- 
randum of the United States appeared to be the 
least drastic in its terms. It was a matter of 
chagrin because a lack of severity in such an ex- 
pression of principles is liable to be misconstrued 
as indicative of a lack of severity in judgment and 
in purpose. In fact, the American members asso- 
ciate themselves in the most complete and uncon- 
ditional way with all that has been said in the 
various memoranda on file relative to the enormity 
of the crime which Germany has committed, and 
they adhere to the bitter denunciation of this crime 
which was so eloquently expressed on Monday in 
the powerful address of the Ron. Mr. ITnghes. 

And if the character of our proposals is not at- 
tributable to a lack of severity in our condemna- 
tion of Germany, no more does it indicate that the 
Government and people of the United States are 

289 



The Malting of the Reparation 

indifferent to the war costs with which they them- 
selves are burdened. For we too have our war 
debt. In magnitude it is comparable to that of 
any other nation, and it constitutes a fearful bur- 
den, which is absorbing, and for many years will 
absorb, the greater part of the nation's income, and 
it seriously threatens the vitality of our economic 
life. 

If then it is in accordance with our sentiment 
that the principles of reparation be severe, and in 
accord with our material interest that these prin- 
ciples be all inclusive, why, in defiance of these 
motives, have we proposed reparation in certain 
limited ways only? It is because, gentlemen, we 
do not regard ourselves as free. We are not here 
to consider as a novel proposal what reparation 
the enemy should in justice pay; we have not be- 
fore us a blank page upon which we are free to 
write what we will. We have before us a page, it 
is true; but one which is already filled with writ- 
ing, and at the bottom are the signatures of Mr. 
Wilson, of Mr. Orlando, of Mr. Clemenceau, and 
of Mr. Lloyd George. 

You are all aware, I am sure, of the writing to 
which I refer : It is the agreed basis of peace with 
Germany. It consists, so far as is relevant to our 
discussion here, of the Fourteen Points contained 
in an address of President Wilson of January 8, 
1918, which, with certain qualifications, were ac- 
cepted by the Allies, by the United States, and by 
Germany as the agreed basis of peace. On these 
terms, says the Allied memorandum, "they declare 

290 



And Economic Sections of the Treaty 

their willingness to make peace with the Govern- 
ment of Germany." This offer was accepted by the 
Government of Germany, and in reliance on the 
agreement resulting from such acceptance the 
enemy laid down his arms. 

Among the terms of peace which were accepted 
by both sides we find provisions relative to repara- 
tion. What are these provisions? 

The address of January 8th says: 

Belgium, the whole world will agree, must be evacuated 
and restored. * * * All French territory should be freed 
and the invaded portions restored. * * * Rumania, 
Serbia, and Montenegro should be evacuated; occupied terri- 
tory restored. 

The Allied qualification or enlargement of these 
provisions is contained in the following language : 

The President declared that invaded territories must be 
restored as well as evacuated and freed. The Allied Gov- 
ernments feel that no doubt ought to be allowed to exist as 
to what this provision implies. By it they understand that 
compensation will be made by Germany for all damage done 
to the civilian population of the Allies and their property 
by the aggression of Germany by land, by sea, and from 
the air. 

The foregoing language thus constitutes, in so far 
as reparation is concerned, the terms upon which 
the United States and the Allies agreed to make 
peace with Germany and the terms upon which 
Germany accepted the armistice of November 11, 
1918. 

20 291 



The Making of the Reputation 

Gentlemen, we have here an agreement. It is on 
agreement which cannot be ignored, and I am con- 
fident that no one here would propose to ignore it. 
I know that I hare the full concurrence of all in the 
proposition that if this agreement constitutes a 
limitation upon our right to demand reparation of 
the enemy, that limitation will be respected. 

And can there be any question that this agree- 
ment does constitute a limitation? 

It is perfectly obvious that it was recognized at 
the time of the negotiations in October and Novem- 
ber, 1918, that the reparation then specified for 
would limit the Associated Governments as to the 
reparation Avhich they could demand of the enemy 
as a condition of peace. The whole purpose of Ger- 
many was to ascertain the maximum which would 
be demanded of her in the terms of peace, and the 
action of the Allies in especially stipulating at that 
time for an enlargement of the original proposal re- 
specting reparation is explicable only on the theory 
that it was understood that once an agreement was 
concluded they would no longer be free to specify 
the reparation which Germany must make. 

We have thus agreed that we would give Ger- 
many peace if she would do certain specified things. 
Is it now open to us to say, <k Yes; but before you 
get peace you must do other and further things"'? 
We have said to Germany, "You may have peace if 
among other things you perform certain acts of 
reparation which will cost you, say, ten billion dol- 
lars." Are we not now clearly precluded from say- 

292 



And Economic Sections of the Treaty 

ing, "You can have peace provided you perform 
other acts of reparation which will bring your total 
liability to many times that which was originally 
stipulated." No; irrespective of the justice of the 
enemy making the latter reparation, it is now too 
late. Our bargain has been struck for better or for 
worse ; it remains only to give it a fair construction 
and practical application. 

The fundamental proposition, therefore, put 
forth by the American members of this commis- 
sion is that we demand of Germany, as a condition 
of peace, all of that reparation, but only that, stipu- 
lated for by a fair construction of the agreement 
with Germany as to what the terms of peace should 
be. 

This is a proposition from which, frankly, I do 
not see how any one of us can dissent. It is, per- 
haps, unnecessary for me to have pressed and em- 
phasized this point as I have done, and I would not 
have done so except that I have been struck by the 
fact that in none of the memoranda of principles 
which have been filed save that of the United States 
and of Serbia, is there any reference to the agree- 
ment as to what should be the terms of peace. The 
American delegation have, therefore, felt the ad- 
visability of drawing this matter to the attention of 
the commission, and of proposing, as the starting 
point in our deliberations, the language relative to 
reparation contained in the agreement with Ger- 
many as to the terms upon which she could have 
peace. 

293 



The Making of the Reparation 

If this proposition is sound, our task bcomes one 
of construction rather than of original thought. 
We may have, and I have no doubt that we all do 
have, very definite views as to the reparation which 
could in justice be required of Germany. But the 
occasion for the presentation of such original views 
was in the early days of ^November, 1918, and not 
today. Today we find the question prejudged, and 
however strongly we may feel that the reparation 
stipulated for at that time falls short of what the 
enemy ought to pay, we must accept the decision 
of those who then had the power of decision in their 
hands. Is it not fair to assume that they judged 
that to prolong the war for the purpose of securing 
a theoretical right to full reparation would have 
been to sacrifice substance to form, since it would 
have meant balancing the jn'oblematic ability of the 
enemy to pay against the real and vital expenditure 
in life and in money which every day of war en- 
tailed? 

We pass then to the construction and application 
of the agreed terms of peace. The construction pro- 
posed by the American members is set forth rather 
fully in the memorandum which has been filed and 
a copy of which is in the hands of each of you. 
Briefly, we take the view that the terms of peace 
proposed and accepted are not to be construed as 
waiving any clear right of reparation due under ac- 
cepted principles of international law. We thus 
recognize that our agreement with Germany is not 
in derogation of those principles of jurisprudence 

2d± 



And Economic Sections of the Treaty 

upon which the French memorandum and upon 
which Mr. Hughes' address purport to base 
themselves. But we are also compelled to recog- 
nize that in so far as we base our claims, not upon 
contractional law but on the law of torts, we are 
restricted to damage arising from illegal acts. It 
is not enough that an act be immoral, that it be 
cruel, that it be unjust, unless at the same time it 
be illegal. It is the quality of illegality alone which 
in law gives rise to a right of reparation. Interna- 
tional law and the municipal jurisprudence of all 
civilized nations are in accord in this respect. 

Accordingly it is the American proposition that 
where the enemy has committed an act clearly vio- 
lative of international law as existing at the time 
of the commission of the act, he is liable to make 
reparation for the damage caused thereby. This 
involves the complete repayment to Belgium of the 
damage to her resulting from Germany's violation 
of her covenant not to make war upon Belgium. 
The illegality of this act and the duty of making 
reparation have already been formally admitted 
by Germany. It further means that the enemy is 
liable for damage resulting from such miscellaneous 
illegal acts as the deportation of civilians, attacks 
on undefended towns, sinkings of merchant ves- 
sels without warning, and other illegal acts too 
numerous to mention here. 

In addition to this reparation clue in accordance 
with recognized international law, there is the 
reparation which it was expressly agreed should be- 

295 



The Making of the Reparation 

come a part of the Treaty of Peace, and which rep- 
aration, to some extent, includes that due in ac- 
cordance with international law, but which to a con- 
siderable extent goes beyond. This reparation ex- 
pressly stipulated for involves a restoration of the 
invaded areas of Belgium, France, Rumania, Serbia, 
and Montenegro, and compensation for all damage 
done to the civilian population of the Allies and 
their property by the aggression of Germany by 
land, by sea, and from the air. The American mem- 
bers have given in their memorandum a statement 
of Avhat reparation they believe to be due in accord- 
ance with the foregoing stipulation. The construc- 
tion there given is one which we believe to be fair, 
but which we also recognize is open to question in 
some respects and can advantageously be made the 
subject of an interchange of ideas. I know I may 
safely say that nothing is further from the inten- 
tion and desire of the American members than that 
any construction should be given those words which 
will save the enemy from making reparation which 
he can fairly be said to have agreed to when he ac- 
cepted the proposition of the Associated Govern- 
ments relative to the terms of peace. It is our 
desire to see reparation made to the uttermost 
limit; the limit being a fair construction of the 
agreed terms of peace. 

I accordingly have the honor to propose, on be- 
half of the American members of this commission, 
that the commission accept as a fundamental prin- 
ciple that the reparation to be exacted from the 

296 



And Economic Sections of the Treaty 

enemy is that which is due in. accordance with a 
fair construction of the written agreement of the 
Associated Governments with Germany as the 
terms of peace. 

I further suggest, on behalf of the American 
members, that the commission next consider the 
most expeditious method of reaching an agreement 
as to the construction and application of the lan- 
guage of the agreement relative to reparation. 



Bpbbqh by the Rt. Hon*. W, M, Hughes, r. 
Minister of a- stjra] i v. B sf Commission 

on Reparation, on F: . . I i. 1919. 

Prin 

Id random filed by the British delega- 

tion, to - ommiss . and r - l made by 

at th sitting comn ssion on Febru- 

ary 10th, j is - blisl ed that the principle of 
reparation justified a claim by the Allies for reim- 
bnrs | ige and cost to the 

Allii - the l .1 conseqnence of the 

i ggr war '.. st the Allies by the 

eueniv Pow« - 

The memorandum filed by the American delega- 
tiou, and the able add] ss s in support by Mr.' 

lies, suggest that the right to general reparat 
lias been to soi stent limited by the acceptai 
A" - D rose: as — of Pi S 

i Points : though it is ad- 
mitted that ti j much beyond the par- 
ticular items specified in the Points. 

This n issue of fundamental importas 

Ks discussion inv< - further consideration of the 
principl fuller reference to the correspond- 

d the Governnn the United States 

and of Germany prior to the armistice, than is made 
in the American memorandum 

goo 



And Economic tied ions of the Treaty 

I think 1 m1»;i II best serve the purpose we all have 
in view if I deal first with the points raised by Mr. 
Dulles and by the American memorandum regard- 
ing the effects of International law upon claims for 
reparation; secondly with (lie position alleged to 
have been created by the acceptance by Allies of 
President Wilson's terms of peace, and lastly refer 
very briefly to the parts of Mr. Dulles' argument 
especially that part which seemed to iuiply that 
reparation was a right arising out of contract be- 
tween the victors and the vanquished. 

1. International Law. 

First, then, as to the effect of international law 
upon the right of reparation. 

The principle is accepted by the American dele- 
gation that, outside of the Fourteen Points and un- 
affected by lliein : 

* 

Reparation is due for all damage directly consequent upon 
acts of the enemy clearly in violation of international law 
as recognized at the time of the commission of the acts in 
question. 

This is an admission that coes to the very root of 
the whole question. It means, in the first place, 
that there are basic rights of reparation, which we 
have not by any implication bargained away. But 
in the statement of the principle upon which these 
rights are founded, the American memorandum 
takes a too narrow view restricting it to acts of the 
enemy in violation of international law. 

200 



The Making of the Reparation 

Lord Sumner lias already pointed out that there 
is no rule of international law which so limits our 
rights. Nor indeed is there anything in the Ameri- 
can memorandum to establish this limitation ex- 
cept a mere declaration wholly unsupported by 
reasons. A belligerent is entitled to demand from a 
defeated enemy compensation for all the loss and 
damage due to the enemy's aggression, independ- 
ently of the question whether the war waged by the 
enemy, or anything done by the enemy in the course 
of the war, was in violation of international law. 

Neutralisation of Belgium. 

But, even taking the American proposition as it 
•stands, let us see how far it leads us in relation to 
the outstanding fact of the neutralization of Bel- 
gium. 

Thai neutralization, of course, Hows from a treaty 
— from an agreement between certain nations. In- 
ternational law knows nothing of neutralization 
except as arising out of treaty, and therefore we" are 
to look only to that branch of international law 
which deals with the observance of treaties. 

Rights of Signatories. 

The American memorandum admits that Bel- 
gium's whole war costs are a direct consequence of 
Germany's violation of Belgium's right of neutral- 
ity. That is indisputable; hut we cannot stop there. 
The neutralization of Belgium was not an isolated 
fact; it was not a matter between Belgium and Ger- 

300 



And Economic Sections of the Treaty 

many alone. Belgium's neutrality was the result 
of an agreement between certain nations. It was 
guaranteed by all the signatory powers to the 
Treaty of London — among them being Great 
Britain and France. Great Britain and France 
were bound by their treaty obligation to defend 
Belgium's neutrality; and consequently Germany's 
violation of that neutrality involved, as a direct 
and necessary consequence, the whole war costs, 
not only of Belgium, but of Great Britain and 
France as well. 

It is self-evident that if Germany's breach of in- 
ternational law by the invasion of Belgium involves 
the payment by Germany of Belgium's war costs, it 
equally involves the payment of the war costs of 
those signatories to the Treaty of London who guar- 
anteed Belgium's neutrality. 

Bights of Non-Signatories. 

But more is involved than even this. The Treaty 
of London was much more than a contract between 
the signatories. It was a public international 
pledge relating, not to a matter which concerned 
the signatory parties only, but to a matter which 
concerned the whole world — namely, the preserva- 
tion of the world's peace. The signatory parties 
bound themselves to guarantee the observance of 
the treaty; but the whole w r orld had a right to its 
observance and if the need arose to assist in its en- 
forcement. When Germany violated the treaty, 
Great Britain and France were "bound to defend it; 

301 



The Making of the Reparation 

the United States and Italy were entitled to defend 
it. Germany was the criminal, Belgium the victim. 
Great Britain and France may be compared to the 
policemen whose sworn task is to prevent a breach 
of the law; the United States and Italy and other 
nations may be compared to civilians whose right 
it is — and also whose duty in case of need — to 
come to the rescue. 

Germany's violation of her international pledge 
was an act which the whole world had a right 
to resist; and it follows beyond the possibility of 
dispute that the whole war costs of the Associated 
Powers, being a direct consequence of that vio- 
lation, can also be claimed, and that — even on the 
narrow basis of the American memorandum — rep- 
aration for all those war costs is clearly due from 
Germany. 

Rights Independent of International Law. 

But I have already said that we do not accept 
that narrow basis. We submit that the obligation 
to make reparation is not limited to cases where a 
breach of international law is proved. We submit 
that the reparation, which we are justly entitled to 
claim, is that reparation which the principle of jus- 
tice requires to be paid — the principle that the cost 
of a wrong should be borne by the wrong-doer — the 
cost of an unjust war by the aggressors. This too, 
as clearly shown by Lord Sumner yesterday, is in 
accordance with international law. 

302 



And Economic Sections of the Treaty 
2. The Terms and Principles of Peace. 

The American delegate contended, however, that 
this right had been lost by the acceptance of Presi- 
dent Wilson's Fourteen Points. Lord Sumner has 
already dealt with this argument effectively; but I 
will add some further considerations. 

President Wilson's Addresses. 

Examination of President Wilson's addresses, 
which are referred to in the correspondence be- 
tween President Wilson and Germany, and between 
President Wilson and the Allies, shows that this 
principle of justice has been explicitly accepted 
by the Associated Powers and by Germany. Apart 
altogether from any rules of international law, we 
are able to reply on the definite principles laid 
down by President Wilson himself, in the corre- 
spondence referred to in the note of November 5th, 
and accepted by the Allies and by Germany as the 
basis of a peace of justice. 

In other words, the "terms" and "principles" of 
peace, which, in the American note of November 
5th, the Allies declared their readiness to accept, 
not only do not limit the right to claim full repara- 
tion, but affirm that right in the most ample and 
unqualified terms. 

The American memorandum rightly admits that, 
"The reparation specified for in the Fourteen Points 
is not designed to be comprehensive." 

It adds that such reparation is not in derogation 
of reparation due in accordance with accepted prin- 

303 



77. king of the Reparation 

ciplea of internationa] law. "Kather the Four: 

Points proceed from the basis of existing interna- 
tional law, and specify the further and special acts 
of justice necessary for a proper settlement of the 
war." 

It is undoubtedly true that the Fourteen Points 
are not exhaustive, or exclusive of other reparation 
than that specified in them. The reparation speci- 
fied in them is. as stated, limited to certain special 
aets of justice to Belgium, Frame. Serbia, and 
Montenegro. 

The note of November 5th informed the German 
Government that, subject to certain qualifications, 
the Allied Governments "declare their willingness 
to make peace with the Government of Germany on 
the terms of peaee laid down in the President's 
address to Congress o\' January S. L918, and the 
principles of settlement enunciated in his subse- 
quent addresses. We must look for our principles, 
therefore, in the subsequent addresses as well as 
in the Fourteen Points. 

It is necessary briefly to refer to the correspond- 
once which preceded this note. 

German and American Notes. 

In a note of October 4th, the German Govern- 
ment asked President Wilson to take in hand the 
restoration of peace, and invito the belligerents 
to send plenipotentiaries for the purpose of open- 
ing negotiations. The German Government M ac- 
cepts the programme put forth by the President of 

no t 



And Economic Sections of the Treaty 

the United States in his message fco Congress of 
January 8, 191S, and in his latest pronouncements — 
especially his speech of September 27th — as a basis 
for peace negotiations." Meanwhile an immediate 
armistice was asked for. 

President Wilson replied in a note of October 
8th. Be asked for an explanation: "Does the Im- 
perial Chancellor mean that the Imperial German 
Government accepts the terms laid down by the 
President in his address to the Congress of the 
United States on January 8th last, and in subse- 
quent addresses, and i hat its object in entering into 
discussions would be only to agree upon the prac- 
tical details of their application?" 

Eerr Solf | Foreign Secretary] replied in a note 
of October 19th: "The German Government has 
accepted the terms laid down by President Wilson 
in his address of January 8th, and in his subsequent 
addresses as the foundation for a permanent peace 
of justice. Consequently, the object of the pro- 
posed discussion would be only to come to an under- 
standing upon practical details of the application 
of those terms." 

After some further correspondence, President 
Wilson, in his note of October 23d ? refers to tin 1 
unreserved acceptance by Iho German Government 
of u Thc terms of peace" laid down in his address to 
the Congress of the United Slates on January 8, 
191S, and the principles of settlement enunciated 
in his subsequent addresses, particularly the ad- 
dress of September 27th. lie cannot now refuse 
to take up with the Allied Governments the ques- 

305 



The Making of tJie Reparation 

tion of an armistice. He has, therefore, transmitted 

the correspondence to the Allies with the suggest ion 
that, "// those Governments are disposed to effect 
peace upon the terms and principles indicated their 
military advisers should be asked to suggest terms 
of armistice," 

The correspondence concludes with President 
Wilson's note of November 5th, already referred 
to, and was followed on November 11th by the arm- 
istice. 

Fourteen Points and Subsequent Addresses. 

President Wilson's address to Congress on Jan- 
uary S, 101S. was that in which he set out what 
are known as the "Fourteen Points." 

The following: is believed to be a complete list of 

the "subsequent addresses" referred to: 

1. An address to Congress on February 11, 
191S, in which President Wilson stated four 

principles to 'be applied in the peace settle- 
ment. 

2. A Fourth-of-July address (1918) de- 
livered at Mount Vernon, in which President 
Wilson stated four "cuds" for which the Asso- 
ciated peoples of the world were lighting. And 

3. An address delivered in New York on Feb- 
ruary 27, 1918, in connection with the inaugu- 
ration of the Liberty Loan in which Pres- 
ident Wilson declared certain essential prin- 
ciples and formulated five "particulars." 

30G 



And Economic Sections of the Treaty 

It must be observed, that throughout the corre- 
spondence with Germany, the address of January 
8th and the subsequent addresses were bracketed 
together. The subsequent addresses are not 
subordinate pronouncements; they are independent 
speeches, addressed to different audiences, and of 
equal authority with the speech of January 8th. 
The fact that the Fourteen Points are sometimes 
loosely spoken of as the whole of President Wilson's 
peace terms must not mislead us into forgetting 
that the subject matter of all the negotiations was 
the Fourteen Points of January 8th, and the four 
points of the second address to Congress, and the 
four points of the Mount Vernon address of July 
4th, and the declaration and the five points of the 
New York address of September 27th. All these 
have equal weight and equal authority; and all were 
explicitly referred to in the note of November 5th 
to German v. 

President Wilson's Principles. 

Let us look first at the general principles laid 
down by the President in those pronouncements. 

The first principle stated in the address to Con- 
gress of February 11th is essential justice: 

That each part of the final settlement must be based upon 
the essential justice of that particular case, and upon such 
adjustments as are most likely to bring a peace that will be 
permanent. 



In the Mount Vernon address of July 4th, the 
.11 

21 307 



following is formulated as one of the "ends for 



The Making of the Reparation 

which the Associated peoples of the world are fight- 
ing and which must be conceded them before there 
is peace." 

Honor and It expect for Law. 

The consent of all nations to be governed in their conduct 
toward each other by the same principles of honor and of 
respect for the common law of civilized society that govern 
the individual citizens of all modern states in their rela- 
tions with one another; to the end that all promises and 
covenants may be sacredly observed, no private plots or 
conspiracies hatched, no selfish injuries wrought Avith im- 
punity, and a mutual trust established upon a mutual respect 
for right. 

The Reign of Lair. 

President Wilson added: "These great objects 
can be put into a single sentence: What ire seek is 
the reign of law, based upon the consent of the 
governed, and sustained by the organized opinion 
of mankind." 

Lastly in the New York address of September 
27th, President Wilson emphasized and elaborated 
tliis principle. He first declared that there coald 
lie no peace obtained by airy kind of compromise 
with the Central Empires, because they were with- 
out honor and did not intend justice. 

No Compromise of Principles. 

He further declared: 

It is of capital importance that we should also be ex- 
plicitly agreed that no peace shall be obtained by any kind 
of compromise or abatement of the principles we have 

308 



And Economic Sections of the Treaty 

avowed as the principles for which we are fighting. There 
should exist no doubt about that. I am therefore going to 
take the liberty of speaking with the utmost frankness 
about the practical implications that are involved in it. 



Th c Price to be Paid. 

If it be, in deed and in truth, the common object of the 
Governments associated against Germany and of the na- 
tions whom they govern, as I believe it to be, to achieve by 
the coming settlements a secure and lasting peace, it will 
be necessary that all who sit down at the peace table shall 
come ready and willing to pay the price, the only price, that 
will procure it; and ready and willing also to create in some 
virile fashion the only instrumentality by which it can be 
made certain that the agreements of the peace will be 
honored and fulfilled. That price is impartial justice in 
every item of the settlement, no matter whose interest is 
crossed; and not only impartial justice, but also the satis- 
faction of the several peoples whose fortunes are dealt with. 

* * * But these general terms do not disclose the 
whole matter. Some details are needed to make them sound 
less like a thesis and more like a practical programme. 
These then are some of the particulars and I state them 
authoritatively as representing this Government's interpre- 
tation of its own duty with regard to peace. 



The first of these particulars is that — "the im- 
partial justice meted out must involve no discrimi- 
nation between those to whom we wish to be just 
and those to whom w T e do not wish to be just. It 
must be a justice which plays no favorites and 
knows no standard but the equal rights of the 
several peoples concerned." 

309 



The Making of the Reparation 

Acceptance of these Principles, 

The principles thus enunciated by President 
Wilson are identical with the principles of justice 
which my colleagues and I have laid before this 
commission. 

Take the first clause of the second address to 
Congress: "Each part of the final settlement must 
be based upon the essential justice of that particu- 
lar case and upon such adjustments as are most 
likely to bring peace that is permanent." 

Take the third point of the Mount Vernon 
speech: The same principles of honor and respect 
for law between states as between individuals — 
"to the end that all promises and covenants may 
be sacredly observed, no private plots or conspira- 
cies hatched, no selfish injuries wrought with im- 
punity." The summing up — "what tee seek is the 
reign of laic" 

(Significance of Renin of Law. 

Most significant is the phrase into which Presi- 
dent Wilson declares that all his principles can be 
crystallized: "What we seek is the reign of law." 
The application of these words is not partial. 
There are no exceptions, no limitations, no qualifi- 
cations. They extend to the remedying of past as 
well as future wrongs. President Wilson is speak- 
ing of a just peace settlement, and he does not say: 
"we shall seek justice in the reign of law tomor- 
row; let us wipe the slate as to yesterday." On 
the contrary, he makes it plain, both as to particu- 



•> 



10 



And Economic Sections of the Treaty 

lars .and as to gpnor.il principles, that all wrongs 
arc to be righted, all outstanding accounts setl 1<< 1 
on the basis of justice. 

Essential justice, and a permanent peace. No 
selfish injury wrought with impunity. What words 
could more aptly express the right of reparation 
against the aggressor for the cost of the war to the 
full limit of his capacity to pay? 

The reign of law — and the same respect for law 
between nations as between individuals. To realize 
the significance of these words, let us turn to the 
civil codes of all nations — Germany included. 
What do they say? No wrong without a remedy. 
Whatever the nature of llie wrong — whether to life, 
limb, health, property, liberty, or any other right, 
the wrong-doer must, as far as he can, make repara- 
tion for the wrong. As it is between individuals, 
so it must be between slates. That is the reign 
of law; that is the principle of justice. 

To saddle the defenders of the world's liberties 
with the burden is not just; it is a monstrous in- 
justice 1 . To compensate only some of the sufferers 
and leave others to bear the burden of their losses 
is not just. To let the wrong-doer escape payment 
for the damage he has wrought does not tend to a 
permanent peace; it encourages him to break the 
peace again at the first opportunity, in the sure and 
certain hope that even if he fails again he will not 
have to pay the bill. 

The same great principle is emphasized even 
more strongly in the New York address. There can 
be no bargaining or compromise of principles; to 

311 



The Making of the Reparation 

achieve a secure and lasting peace, "it will be neces- 
sary that all who sit clown at the peace table shall 
come ready and willing to pay the price, the only 
price, that will secure it. * * * That price is 
impartial justice in every item of the settlement." 
Impartial justice "must involve no discrimination 
between those to whom we wish to be just and those 
to whom we do not wish to be just. It must be a 
justice which plays no favorites and knows no stan- 
dard but the equal rights of the several peoples con- 
cerned/' 

"We have agreed to those principles. We invoke 
those principles. They cover full reparation for 
the costs of the war. 

3. The American Argument. 

Lastly I come to the observations which I fore- 
shadowed on Mr. Dulles' arguments in his address 
today. 

Reparation not Based on Con tract. 

Mr. Dulles speaks of the right to reparation from 
a defeated belligerent as resting upon "contract," 
because the terms imposed are set out in the treaty 
of peace. But to speak of contract in such a case 
is a. misuse of terms. Contract means agreement, 
and implies equality of status between the parties, 
and a free consent. There is no question of agree- 
ment in the terms of reparation which a victorious 
belligerent imposes upon the enemy. 

312 



And Economic Sections of the Treaty 

Amount Irrelevant to Principle. 

Again, Mr. Dulles is concerned at the huge 
amount of the total war costs, and suggests that to 
insist on the full claim for all the Allies will preju- 
dice the satisfaction of those states which have 
suffered material damage. But these considera- 
tions have nothing to do with this discussion which 
relates to the principles on which the reparation 
due by Germany is to be assessed. Presentment of 
the full bill for all war costs by the United States 
and other powers need not necessarily mean any 
deferment of the more urgent claims for reparation. 
Certain claims could always be preferred. 

Distinction Between Penal Indemnity and Repara<- 
tion. 

Mr. Dulles also referred to a speech by Mr. Lloyd 
George, on January 5, 1918, in which he disclaimed 
the intention of demanding from Germany such an 
indemnity as Germany wrung from France in 1871. 

Now, in the first place, that speech was made at 
a very dark hour for the Allies, when they might 
well have been prepared, for the sake of peace, to 
take something less than their due. But Germany 
did not accept those terms; she went on fighting. 
And in any case, what did Mr. Lloyd George say? 
That we would not claim such an indemnity as 
Germany imposed upon France — namely, an in- 
demnity of twice the cost of the war — an indemnity 
of which one-half was not reparation, but penalty. 
We claim no penalty, but reparation only. We 
ask for justice, not revenge. 

313 



The Making of the Reparation 
The following is a summary of the position: 

(1) The Fourteen Points are not exhaustive as 
to reparation. 

(2) It is admitted by the American memoran- 
dum that Belgium's full war costs must be paid, 
as Germany's attack on Belgium, whose neutrality 
she had guaranteed, was a violation of interna- 
tional law. 

(3) Whatever rights Belgium has under inter- 
national law, by reason of her neutralization, are 
clearly shared by those Powers who guaranteed her 
neutrality, and incurred fearful losses in enforcing 
it. 

(4) The other Associated Powers (e. g., United 
States and Italy), who helped to defend Belgian 
neutrality, can also claim their war costs. 

(5) Therefore, even on the narrow basis of the 
American memorandum, reparation can be claimed 
for the whole war cost of the Associated Powers. 

(6) But independently altogether of any ques- 
tion of violations of international law, full repa- 
ration is demanded by the principle of justice. 

(7) The principle of justice, and the reign of 
law between states as between individuals, have 
been affirmed by President Wilson and incorpor- 
ated in the terms and principles of peace accepted 
by the Associated Powers and by Germany, which 
clearly cover the demand of full reparation. 



o 



14 



And Economic Sections of the Treaty 

(8) Therefore 1 , whether we apply the principles 
of the American memorandum, or whether we inde- 
pendently apply the principles formulated by 
President Wilson and accepted, of "the reign of 
law" and a just peace in either case we reach the 
same conclusion, that we are entitled, to reparation 
for the full costs of the war. 



Translation of Address of Mr. Klotz, French 
Minister of Finance, February 15, 1919. 

I do not care at the moment to express a detailed 
opinion upon the English thesis or that of the 
American. The French delegation at an appro- 
priate time will express its reasoned judgment. At 
the moment the debate is on a higher level. 

The American delegation declines to take up the 
discussion on the basis accepted by the memoranda 
of all the other delegations. They refuse to dis- 
cuss whether the principles which we have form- 
ulated, that Germany shall repair in its entirety 
all the damage which she has caused, is or is not in 
conformity with justice and with right. 

Perhaps, if I may be permitted to interpret cer- 
tain words, certain silences of Mr. Dulles, the 
American delegation would be disposed to admit 
the justice of our argument concerning reimburse- 
ment of the cost of the war. But in their view it is 
too late for such claims. The case has been tried 
and decided. We are in the presence of a formal 
contract which becomes binding on the parties and 
from which they are not permitted to depart. 

The American argument rests upon this asser- 
tion, that there exists a contract between the Allied 
and Associated Towers on the one hand, and 
Germany on the other hand, and that the terms of 
this contract are such as to deny to the Allied 
Powers the right to claim reimbursement for their 
war costs. If the American delegation cannot 



n 



16 



And Economic Sections of the Treaty 

definitely support this assertion, its argument falls, 
and we find ourselves guided no longer by con- 
tractua] law but by justiee alone. 

Where, then, is the contract? In what document 
does it find expression? 

Every contract implies reciprocal obligations and 
engagements. "Where do we find these elements 
in the Allied contract? Have we, the Associated 
Powers, taken — impliedly let it not be forgotten — 
the undertaking not to demand from Germany reim- 
bursement for the cost of the war? And what did 
Germany grant us in exchange? The engagement 
not to continue the war, to lay down their arms? 
It is thus in his argument that Mr. Dulles has 
defined the Allied contract. 

We however assert, and assert in the most formal 
manner, that between the exchange of notes to 
which (he American delegation refers, and where 
the American delegation would find the elements 
of a contract, and the surrender of Germany there 
is no relation of cause and effect. Germany sur- 
rendered on November 11th because she was con- 
quered, and not because she found acceptable and 
equitable the conditions of President Wilson and 
of the Associated Powers. Germany, who today is 
trying again to raise her head, was no longer mate- 
rially and morally able to reject the conditions of 
peace, whatever they might have been. She has 
indeed admitted this but recently. If the American 
delegation had any doubts in this respect I am 
certain that the opinion of General Pershing would 
suffice to dispel them. 

317 



The Making of the Reparation 

Between the German Government and the Asso- 
ciated Powers there exists but one document which 
has the form and the spirit of an agreement. — to 
employ the English phrase — and which could rea- 
sonably be called such, that is the Armistice 
Convention of November 11, 1918. 

If the acceptance of the Fourteen Points of Pres- 
ident Wilson, as modified by the note of November 
5, 1918, as denning the future Treaty of Peace, had 
in the eyes of the Germans been the determining 
cause, the essential condition of the signature of 
the armistice, they would not have failed expressly 
so to state. If Germany had been in a position to 
make demands, if among other things she had been 
able to condition the signature of the armistice 
upon a declaration of the Allied Powers binding 
them in advance concerning the future terms of 
peace, Germany would not have failed to have done 
so. She has not done so, and this silence is alone 
a rebuttal of the argument presented by the Amer- 
ican delegation. 

If, then, on that date Germany had not consented 
at least to the minimum program of the Fourteen 
Points, if she had not agreed to deliver us as guar- 
antees of safety considerable areas of territory and 
substantial quantities of material, the Associated 
Towers would without doubt have continued the 
war. But in the one, as in the other case, it was a 
question of minimum guarantees warranting the 
cessation of hostilities that Germany sought, that 
had become for her an imperative necessity. 

318 



And Economic Sections of the Treaty 

As we were led in the course of the negotiations 
to formulate new demands, concerning;, for instance, 
the occupation of the right bank of the Rhine — 
the armistice having been concluded for a short 
period only, which necessarily implies the possi- 
bility of modifying its terms, as was brilliantly 
argued the other day by Baron Sonnino — so, too, we 
have not for an instant considered that from several 
points of view we were no longer bound by the 
armistice contract of November 11th. As in the 
case of the Rhineland, we are justified in formulat- 
ing demands which are not perhaps expressly in- 
cluded in the Fourteen Points of President Wilson, 
but which are based, as we are ready to show, on 
justice and on right. And we will not have to 
support these claims on the basis of public interna- 
tional law as appealed to by the American delega- 
tion, which law unfortunately is derived but too 
often from precedents of force and violence, but on 
the "common law" of civilized nations, to which in 
three points of his address of July 4th, which ad- 
dress is also included by reference in the note of 
November 5th, President Wilson referred in the 
following terms : 

The things for which the Associated peoples of the world 
are fighting, and which must be conceded them before there 
is peace, are the following: * * * 

The consent of all nations to be governed in their conduct 
toward each other by the same principles of honor and of 
respect for the common law of civilized society that govern 
the individual citizens of all modern states in their rela- 
tions with one another; to the end that all promises and 
covenants may be sacredly observed, no private plots or con- 

319 



The Making of the Reparation 

spiracies hatched, no selfish injuries wrought with impunity, 
and a mutual trust established upon a mutual respect for 
right. 

Today what would the American delegation have 
us admit — that we have impliedly renounced re- 
course to this common law : that by our silence we 
have agreed that our nation, ravaged in 1871, 
assaulted, invaded, systematically sacked today, 
should accept, and that the nation responsible for 
all of these wrongs should be freed from, the most 
terrible financial burden that any European nation 
has ever known? And that our statesmen and 
generals meeting at Versailles have conceded \sith- 
out discussion and without debate that victorious 
Prance should he 1 a ruined Prance, crushed for a 
century, perhaps forever? I cannot accept that 
unless it is proved. 

I am in a position to give evidence on another 
point, having taken pan in the work at Versailles 
on the 2d and 4th oi last November. 

If, in my opinion, there is no contract in accord- 
ance witli which 1 have waived my rights to re- 
imbursement tor certain categories of expenses re- 
sulting from the war, on the other hand there does 
exist a contract by the terms of which I have ex- 
pressly reserved these rights. 

I have said that between the Allies and Germany 
there is but one written document which has up till 
now been signed, having the form and giving rise 
to the legal relations of a contract. This is tin 1 
armistice convention of November 11, 1918, be- 
tween the Allied and Associated Towers represented 



QO 



20 



And Economic Sections of the Treaty 

by Marshal Foch and Admiral Wemyss and the 
German delegation. 

Now, as to the question which we are discussing, 
does this document contain any express reservation 
of our rights? Is il there specified that as con- 
cerns reparation of damage we have in advance tied 
our hands? 

Let us open this agreement to the chapter entitled 
"Financial Clauses," the terms of which were by 
us carefully considered, weighed, and formulated. 
They were not hastily written. What are the first 
words? How is the first phrase drafted? 

XIX. Reserving all subsequent claims and demands on the 
part of the Allies and of the United States, reparation of 
damage. 

Here is something clear. 

Our rights are reserved as to all "subsequent 
claims and demands." 

We have before us an express clause, which im- 
plies no limitation of our rights, which stipulates 
a full reservation of all our rights, particularly as 
concerns "reparation of damage." 

Let it not be argued that this is a phrase which 
has regard exclusively to the armistice and the ob- 
ligation of which was to be limited to the armistice. 
At that time an armistice of a month only was 
anticipated. It could not then have been thought 
that complete reparation of the damage caused by 
the war could have been brought about even during 
successive renewals of the armistice. The reserva- 

321 



The Making of the Reparation 

tion clearly contemplated the future treaty and the 
negotiations which would result in its signature. 

Nor can it be said that this reservation contem- 
plates exclusively such claims and demands as are 
contained in the Fourteen Points of President Wil- 
son modified in accordance with the declaration of 
the Allies of November 5th. If this declaration 
of November 5th had in fact constituted a contract 
binding the Associated Powers and Germany, what 
occasion, what necessity would there have been to 
refer to it in the Armistice Convention? 

That which exists, that to which I hold, that to 
which I have a right to hold, is the fact that in a 
contract between the Allied Powers and Germany 
we have reserved our rights in reference to the Jinan 
cial clauses and the reparation of damage <v as to 
all future claims and demands." 

Therefore I have the honor to call on you to pro- 
claim our right to integral reparation. You will 
see later how by agreement this right shall be ap- 
plied. We will consider whether it is wise to exert 
our right to the full. We will settle the question 
of the priority of certain claims, a priority recog- 
nized I trust by all of the states represented here. 
We will then have settled the principles which will 
permit our sub-commissions to undertake a useful 
work. 



Address on Behalf of tub American Delegates. 

By John Foster Dulles, Esq., on 

February 19, 1019. 



Mr. President: 

The very illuminating and instructive debate of 
recent days has brought forward certain arguments, 
which, unless they can be disposed of, seriously af- 
fect the validity of the principles proposed by the 
American delegation. Mr. Loucheur frankly ex- 
presses the view that the structure of our case had 
been demolished, and, with remarkable penetration 
of thought and clarity of expression, he has ana- 
lyzed our discussions to date and had laid before 
you three considerations which in his mind, disturb 
considerably the American principles. These are : 

The argument of the Hon. Mr. Hughes, based on 
the violation of the neutrality of Belgium. 

The argument of the Hon. Mr. Klotz, based on 
Article XIX of the armistice of November 11. 

The argument of the Hon. Mr. Protchiteh, rela- 
tive to the difference in the situation as regards 
Germany on the one hand and Austria-Hungary, 
Bulgaria, and Turkey on the other hand. 

It was the opinion of Mr. Loucheur, and I confess 
it is my own, that these constitute the three serious 
arguments which have been directed against the 
American case as originally presented. I would 

22 323 



The Making of the Reparation 

have desired in any evenl to reply to these argu- 
ments, and I welcome the clear analysis made by 
M p. Loncheur which, sweeping away irrelevanl mat- 
ter, lias crystallized the situation and presented it 
in concise and lucid form. 

Let me first, in a word or two, restate the Ameri- 
can proposition, in order that tin 4 full force and 
relevancy of the objections thereto may be (dear 
in one minds. 

The American statement of principles is based 
on Ilio fundamental proposition thai wo are not 

here to create new rights; thai we are here, to nse 
(lie words which have received authoritative sanc- 
tion, "to consider the details of the application" 
of existing fights. To determine what these rights 
are, we turn first to what we regard as an agreement 
between the Associated Governments and Germany 
as to the terms of peace. We give what we believe 
to be a fair const met ion of this agreement. We also 

note that this agreement does net waive rights 
Which may have come into being previously in ac- 
cordance with accepted principles of international 
law. We accordingly regard these rights as exist- 
ing and to be enforced. The 1 practical result of our 
conclusion is that by agreement Germany is Liable 
io make compensation for all damage done to (he 
civilian population of the Allies and (heir property 

by (lie aggression of Germany by land, by sen, and 

from (he air; (hat by <>/>< nil ion of !<tir those who 
have been the victim of admittedly illegal acts, such 

as the violation of Belgium, (ho torpedoing of mer* 

32 1 



Ami Econoniio Sections of the Treaty 

chant vessels without warning, the Inhumane treat- 
ment <>f prisoners of war, etc., etc., arc entitled <<> 
reparation. 

Having thus attempted hastily to reconstruct 
the American case before your eyes, let us now con- 
sider the effect thereon <>l* the argument which Mr. 
Loucheur has so ably epitomized. 

Let me first deal with the argument of the honor- 
able delegate for Serbia. He says that not having 
reached any agreement with Austria-Hungary, Bul- 
garia, or Turkey, as to what the terms of peace 
with these countries shall be, we are free to en- 
deavor l<> impose any such terms ;<s we decide !<> 
be just. In a technical sense this may be correct. 
I am unable l<> point f<> any signed document 
whereby the nations al war with Austria Hungary, 
Bulgaria, and Turkey agreed with these nations 
as to what the reparation terms of peace should 
be. I do maintain, however, that ii was under- 
stood that lli«' settlement with these countries was 
to be in the spirit of the terms specifically agreed 
to as to Germany and which were originally enun- 
ciated as the terms of a general peace. I doubt 
that Serbia herself is prepared l<> renounce the 
right to appeal to those terms as embodying the 
principles which should govern the settlement 
of her war with Austria-Hungary, But if we 
accept the argument of the honorable delegate <»f 
Serbia, what is its implication? H is said that the 
agreement as to the terms of peace relates only 
to Germany; therefore, as 1<> others we are free. 
By the same token, however, as to Germany we are 

325 



The Moling of the Reparation 

not free. We are not free because we have spe- 
cifically agreed among 1 ourselves and with Ger- 
many what the terms of peace shall be. 

This assertion leads me to a discussion of the 
point which Mr. Klotz developed and which, if I 
understand right, Avas to the effect that we have no 
agreement with Germany as to the terms of peace. 
To quote his words : "There exists only one docu- 
ment which has the form and the spirit of a con- 
tract, of an agreement, and which can legitimately 
be described as such. That document is the Armis- 
tice Covenant of November 11, 1918.'' 

Gentlemen, this is a serious assertion, the conse- 
quences of which, if it be accepted, are momentous 
It means that where we thought we had a chart, we 
have none. 

I have taken the liberty of circulating among you 
a fairly complete abstract of the correspondence 
with Germany leading up to the armistice of No- 
vember 11, 1918. [f you will refresh your recollec- 
tion as to this correspondence, you will see that 
Germany initiated the discussion by a request for 
an armistice, which request the German Govern- 
ment asked the President of the United States to 
transmit to his associates. The President of the 
United States refused to transmit such a request 
until all of the interested parties should be in com- 
plete agreement as to the basic terms of peace. The 
President even went so far as to refuse to consider 
j?n armistice on the understanding that a certain 
program should be "the basis for peace discussion." 
The President insisted on the withdrawal of this 

32Q 



And Economic Sections of the Treaty 

phrase and the substitution in lieu thereof of the 
phrase "terms of peace," as to which discussion 
would be limited to "the practical details of their 
application." The President transmitted this cor- 
respondence to the Allies, 'who replied that they 
were willing to make peace on the terms specified, 
with two qualifications, one of which was a clarifi- 
cation of the term specifying the compensation 
which should be made by Germany. This under- 
standing was accepted by the President and com- 
municated to Germany. Then — and then only — 
was the German Government advised that an 
armistice would be considered. You will thus see, 
gentlemen, that there were two series of negotia- 
tions — one as to the terms of peace, the other as to 
the terms of armistice — and that until there was 
agreement as to the terms of peace, consideration 
of an armistice was postponed. I cannot believe 
that Mr. Klotz now seriously contends that no 
agreement came into being when the Allies, after 
carefully considering this correspondence which 
had passed between the United States and Ger- 
many, stated : "They declare their willingness to 
make peace with the German Government on the 
terms of peace laid down by the President's address 
to Congress of January, 1918, and the principles 
of settlement enunciated in his subsequent ad- 
dress." I assert that there is in that declaration 
the spirit — nay, more, the form and substance of 
an agreement. We find every element legally nec- 
essary to constitute a binding contract. We have 
a proposal by one party, a negotiation leading to 

327 



The Malting of the Reparation 

a change of terms, and a final acceptance by all, 
in reliance on which all of the parties, not only Ger- 
many, but the United States and others, have 
changed their position. 

But I do not, I am sure, have to resort to a text- 
book of law and prove the existence of a legal agree- 
ment. This is not a. transaction between petty mer- 
chants. When great France, in that critical hour 
and with issues of world-wide importance at stake, 
solemnly and in conjunction with her Allies, said 
to the United States for its guidance and for trans- 
mission to Germany: "We will make peace on spe- 
cific terms," I know that the United Slates, that 
the world, can count upon France making peace 
on these terms. 

So I cannot believe that I have understood Mr. 
Klotz aright in this matter and that France re- 
gards itself as free to propose terms other than 
those adopted by her on November 4, 1918. I feel 
that it must rather be the thought of Mr. Klotz that 
the armistice agreement, occurring after the agree- 
ment as to the terms of peace, in some way modified 
this binding engagement which she had assumed. 

Let us consider this possibility. In the first 
place, as I have pointed out, the negotiations rela- 
tive to the terms of peace, and the negotiations rela- 
tive to an armistice, constituted two distinct 
series of negotiations. The Associated Powers 
were one in a determination not to consider an 
armistice until there should be complete agreement 
as to the terms of peace. Accordingly, although it 

328 



And Economic Sections of the Treaty 

was on October G, 1918, that the German Govern- 
ment asked for an armistice, it was only on Novem- 
ber 5th, after complete agreement had been reached 
as to the terms of peace, that the German Govern- 
ment was notified that armistice commissioners 
would be received. Is it, therefore, conceivable 
that the armistice could control and govern the 
terms of peace? Is it conceivable that the Associ- 
ated Governments would have prolonged the war 
for a month to secure an agreement as to terms of 
peace, which agreement six days later was to be 
nullified by an armistice formulated by military 
advisers ? 

It appears clearly throughout the correspondence, 
copies of which are before you, that it was under- 
stood that the armistice was peculiarly a matter 
for military advisers. The terms of peace were first 
settled by the highest political authorities of the 
Associated Governments. Had Marshal Foch and 
Admiral Wemyss, great as were their positions, 
power to amend and overrule by the armistice 
which they signed terms of peace which had previ- 
ously been agreed to by President Wilson, Mr. 
Orlando, Mr. Lloyd George and Mr. Clemenceau? 
Obviously not. The armistice was, as the diplo- 
matic correspondence shows it was to be, a military 
instrument framed by military advisers. But did 
Marshal Foch and Admiral Wemyss misconstrue 
their authority ; did they purport to introduce into 
the armistice provisions which would modify the 
terms of peace to which their superiors had previ- 
ously agreed? Such action, if they took it, could 

329 



The Making of the Reparation 

not be binding. But it is clear that they did not 
take it. 

The armistice says that, reserving all rights as 
to future claims and demands, certain gold and 
securities are to be delivered up. Why was this 
reservation made? Obviously not to modify or affect 
the terms of peace, but to insure that, as a military 
and interim measure, further deliveries could be de- 
manded. The right so reserved has been exercised 
subsequently in renewals of the armistice which 
require additional surrenders of property by Ger- 
many. If, therefore, we are here sitting as an 
armistice commission, I fully agree that we could 
consider the desirability of requiring further de- 
liveries of goods by Germany, and exercise the 
rights reserved in the armistice of November 11th ; 
but we are not the armistice commission. We are 
the peace commission. It is not our duty to con- 
strue and to apply the terms of the military 
armistice, but the peace terms. Accordingly, for 
the purpose of our discussion here, the armistice 
is irrelevant. Our duty here is to determine the 
practical details of the application of the agreed 
terms of peace. We accordingly turn back to those 
terms of peace, and I appeal to Mr. Klotz to re- 
affirm the solemn declaration of his Government, 
made on November 4, 1918, that France is willing 
to make peace witli Germany on the terms then 
specilied. If he does reaffirm that declaration, he 
must then be prepared to consider with me, not the 
terms of armistice, but the "terms of peace." 

330 



And Economic Sections of the Treaty 

So much, gentlemen, for the argument based on 
the terms of armistice. There is left now for con- 
sideration the third proposition, that enunciated by 
the Hon. Mr. Hughes, to the effect that independent- 
ly of any agreement as to the terms of peace, the 
Associated Governments are entitled to recover war 
costs through the operation of the principle that 
rights which arose by operation of law, upon the 
doing of an illegal act, are not waived and can be 
enforced. 

The discussion so far has been on a judicial basis, 
and I am sure I shall not be subject to criticism if 
I keep it on that basis. Accordingly, I propose to 
consider for a moment where Mr. Hughes' argument 
logically leads us. To this end I apply the univers- 
ally accepted principle that to warrant reparation 
of damage for an illegal act, there must be a causol 
relationship between the illegal act and the alleged 
damage. In the case of what countries can there be 
claimed to be a causal relationship between the vio- 
lation of Belgium and general war costs? Great 
Britain based its declaration of war on the 
violation of Belgian neutrality, and I accordingly 
concede that it is arguable that the war costs 
of the British Empire are attributable to 
this act. But this cannot be said of the 
war costs of France. War came to France as a re- 
sult of the declaration of war against her by Ger- 
many. The invasion of Belgium was but an inci- 
dent to the prosecution of this war against France 
which had previously been determined upon. The 
war costs of Italy cannot be alleged to bear any re- 

331 



The Making of the Reparation 

lationship to the invasion of Belgium. The same is 
true of Serbia, of Greece, of Rumania, of Czecho- 
slovakia, of Poland, of Russia, of Japan, of the 
United States. Only in the rase of Belgium and of 
Great Britain is it even arguable that there is a 
causal relationship between war costs as a whole 
and the invasion of Belgium. Having; thus clarified 
the scope and application of the doctrine enunciated 
by Mr. Hughes, let us consider its validity even in 
this limited sphere. 

Now, gentlemen, the question of the proper con- 
struction and the legal effect of the Treaty of Lon- 
don of 1839 is one which we could discuss for 
many months and then possibly not find ourselves 
in agreement. I do not wish to involve the com- 
mission in these difficult qnestions of construction. 
I \\ill merely suggest to you one of several reasons 
why, in my opinion, the argument of Mr. Hughes 
is not sound. The Treaty of 1839 is in form a 
treaty for the benefit of Belgium. Mr. Hughes 
treats it as such. Historically, it had its birth 

«/ 7 

in that understanding. Belgium desired to secure 
certain frontiers which would be strategically 
sound. The then five great Powers were unwill- 
ing to grant her those frontiers, but in exchange 
for the acceptance by Belgium of restricted fron- 
tiers, agreed to insure Belgian neutrality. The 
treaty thus constitutes what, in the common law, 
is known as a beneficiary contract, or contract for 

i/ 7 

the benefit of a third party. This means then that 
when Great Britain, France, Russia, Austria, and 
Prussia agreed to disenable themselves from mak- 

332 



And Economic Sections of the Treaty 

ing war on Belgium, the benefit of that agreement 
ran in favor of Belgium alone. Accordingly, when 
Germany made war upon Belgium that was an il- 
legal act — illegal, that is, in respect to Belgium, 
who was the beneficiary of the contract that war 
would not be made. Any special position, there- 
fore, that results from a violation by Germany of 
its covenant made to the benefit of Belgium re- 
dounds to the benefit of Belgium, and not to the 
benefit of the other contracting powers. 

That Great Britain may have been under a duty, 
moral or legal, to come to the aid of Belgium does 
not modify in any degree our conclusion that the 
benefits of the treaty ran in favor of Belgium. If 
Great Britain, in 1839, assumed an obligation, she 
did so in pursuance of what she then regarded as 
adequate consideration, and the performance of 
that duty could, not give rise to a special right. 
Mr. Hughes stated, "Great Britain .and France may 
be compared to the policeman whose sworn task 
is to prevent a. breach of the law." Precisely — hut 
does the policeman receive his hire from the wrong- 
doer when he arrests? No; in making the arrest 
the policeman has but performed his duty — nobly, 
gallantly, at great sacrifice, if you will, but still 
his duty. And the reparation made by the wrong- 
doer is made to the victim — not to the guardian of 
the law. 

Gentlemen, I will not weary you with a further 
discussion of the legal technicalities of beneficiary 
contracts. Nor will I develop the rule as to indi- 
rect damage which, if applied as it has uniformly 

333 



The Making of the Reparation 

been applied in international decisions, notably in 
the Alabama case, would nullify Mr. Hughes' eon- 
elusion, even if I am wrong as to the construction 
of the treaty of 1839. I pass to apply the test of the 
relative reasonableness of our conclusions. If the 
argument which I make is sound, it leads to the con- 
elusion that Belgium stands in a special position 
bv reason of Germany's breach of her covenant not 
to make war on Belgium. That is a conclusion 
which has been accepted by the whole world, even 
including Germany, which formally admitted the 
illegality of its action in respect of Belgium and the 
duty of making full reparation therefor. If the 
argument of Mr. Hughes is sound, it leads to the 
conclusion that Great Britain, and Great Britain 
alone, shares the special position of Belgium, This 
is a conclusion so extraordinary that the Hon. Mr, 
Hughes, with that common sense and bigness of 
heart for which he is noted, was compelled to repu- 
diate it. What form did his repudiation take? Did 
he say : My conclusion is unsound. Therefore I must 
have reached it by unsound processes of thought? 
No; he said: My conclusion is absurd: therefore, I 
will multiply it by ten and the absurdity will dis- 
appear. After adopting reasoning which if sound 
led to the establishment of a. special privilege for 
Great Britain in respect of war costs, he illogieally 
but with a generosity which we can but admire in- 
vited us all to come and share it. 

Gentlemen, if we hold to the domain of reason, 
we cannot adopt such methods. It is clear that 
under no principle of international law has Ger- 



}1 



00- 



And Economic Sections of the Treaty 

many become our debtor for the general easts of the 
Avar. Any such right, if it is to exist, can be created 
only by agreement. So we are forced back again, in- 
evitably, irresistibly, to the proceedings of Novem- 
ber 4th, and the statement of the Associated Gov- 
ernments that they were willing to make peace with 
Germany on certain terms. There is our agreement. 
It provides, and the Allies took special steps to 
specify it: "Compensation will be made by Germany 
for all damage done to all civilian population of the 
Allies and their property by the aggression of Ger- 
many by land, by sea, and from the air." That is 

• t 7 « 7 

our agreement. It is not a basis of discussion — it 
is a term of peace. It does not provide for the ex- 
pense to Governments of maintaining military es- 
tablishments. 

There, gentlemen, are my answers to what Mr. 
Loucheur stated to be the only serious attack on 
the American position. I have given these answers 
sincerely, frankly, as I see the right. 

It is not agreeable for me to stand here as pro- 
ponent of an argument which seems, even in prin- 
ciple, to be in the interest of Germany. I say "even 
in principle" because I believe that the propositions 
enunciated by the American delegation are, prac- 
tically, those which will secure the maximum of 
reparation and its most equitable distribution. 
To demand the gigantic total of war costs would, 
I agree with Mr. Van Den Heuvel, be to jeopardize 
securing that specific reparation as to which Ger- 
many must clearly recognize her liability, and the 
satisfaction of which will tax her resources to the 

335 



The Moling of the Reparation 

limit. But even so, the American delegation would 
not be participating actively in this debate did we 
not feel that vital principles were involved. In a 
material sense we stand to gain, gain greatly, by 
the defeat of our proposition. But we did not make 
war for material interests. We do not make peace 
for material interests. We have sacrificed, and to- 
day again stand ready to sacrifice, our material in- 
terests for principles which we have espoused. I 
stand here today — honestly convinced that we are 
bound by an agreement and that no other course 
is honorably open to us than that which I have 
proposed. 

In saying this, I do not mean to suggest for a 
moment that there is any delegation here actuated 
by different motives. I recognize the existence of 
an honest disagreement. The American delegation 
has listened open-mindedly to the discussion ready 
to be convinced of the errors of their ways. We 
have not been convinced. Accordingly I have tried 
to convince you. I hope I have succeeded. If not, 
may I submit this suggestion: Our debate has re- 
volved around the meaning of the declaration of 
^November 4, 1918. The gentlemen who drafted 
that declaration, who discussed it, who adopted it, 
are here with us. I propose, gentlemen, that we 
ask them their understanding as to the meaning 
and legal effect of that document. 

Whatever we do here is, in any event, subject to 
review and I seriously question whether a decision 
on such important questions of principle as have 
been discussed here is within the comx^etence of this 



O 



36 



And Economic Sections of the Treaty 

commission. If you will refer to the resolution 
creating this commission, you will find nothing em- 
powering us to determine basic principles. This 
commission was created "to examine and report on 
the question of the amount for reparation which 
the enemy countries should pay, and are capable 
of paying, as well as the form in which payment 
should be made." And I think it was added, "to 
recommend measures to guarantee payment." It 
was thus evidently assumed by the commission, as, 
in fact, they had reason to assume, that the terms 
of peace were settled and that all we had to do was 
to "determine the practical details of their appli- 
cation." It appears that this is not the case, but 
that there are important, indeed, fundamental dif- 
ferences of opinion relative to principle. I there- 
fore propose that we should cease discussion here 
and refer back to the Supreme War Council the 
question of whether, in their opinion, war costs are 
properly to be included in the bill for reparation 
to be presented to the enemy. Pending their reply 
W T e can proceed w r ith the other pressing work which 
is before us, and which the world demands should 
be expeditiously dealt with. 



Treatment of Private Property. 

The question of the treatment of private rights 
is dealt with in the German delegation's notes of 
the 22d and 29th of May and in the Annex No. 1 
to their Eemarks on the Conditions of Peace. In 
addition, the general objections set out in these 
documents are reproduced under different forms in 
various parts of the Remarks. 

Questions of Principle. 

The objections of principle to the Conditions of 
Peace put forward by the German delegation oil 
this subject may be summed up as follows : 

(a) It is not legitimate to use the private prop- 
erty of German nationals to meet the obligations of 
Germany. 

(b) The settlement of private rights is not made 
on the principle of reciprocity. 

(c) German property should not be used as a 
guarantee for the liabilities of the states allied to 
Germany. 

(d) The liquidations to be made by the Allied 
and Associated Powers, in depriving the owner of 
the free disposition of his property, are of a con- 
fiscatorv character. 

338 



And Economic Sections of the Treaty 

The answers of the Allied and Associated Powers 
to these objections are as follows: 

(a) As regards the first objection, they would 
call attention to the clear acknowledgment by Ger- 
many of a pecuniary obligation to the Allied and 
Associated Powers, and to the further circumstance 
that the immediate resources of Germany are not 
adequate to meet that obligation. It is the clear 
dnty of Germany to meet the admitted obligation as 
fully and as promptly as possible and to that end 
to make use of all available means. The foreign in- 
vestments of German nationals constitute a class of 
assets which are readily available. To these invest- 
ments the treaty simply requires Germany to make 
prompt resort. 

It is true that, as a general principle, a country 
should endeavour to avoid making use of the prop- 
erty of a part of its nationals to meet state obliga- 
tions ; but conditions may arise when such a course 
becomes necessary. In the present war Allied 
Powers themselves have found it necessary to take 
over foreign investments of their nationals to meet 
foreign obligations, and have given their own do- 
mestic obligations to the nationals who have been 
thus called upon to take a share, by this use of 
their private property, in meeting the obligations 
of the state. 

The time has arrived when Germany must do 
what she has forced her opponents to do. The 
necessity for the adoption of this course by Ger- 
many is clearly understood by the German peace 

23 339 



The Making of the Repartition 

delegates, and Is accepted by them in the following 
passage, quoted textually Prom their note of the 22d 
of May : 

The German peace delegation is conscious 
of the fad thai under the pressure »>r the bur- 
den arising from the peace treaty on the whole 
future ci* German economic life, German prop- 
erty in foreign countries cannot be maintained 
<o its previous extent. On the contrary, Ger- 
many, in order (o meet her pecuniary obliga- 
tions, \\ ill have (o sacrifice this property abroad 

in wide measure. She is prepared Id do so. 



The fundamental objection mentioned above is 

completely answered by the note itself. 

(10 The German delegation maintains in its note 
o\' the 22d of May thai there is onl\ the appearance 
o\' reciprocity in regard to the settlement o( enemy 

• 

propel ty, and this objection [s developed in the An 
ne\ to the Remarks. 'The objection, however, arises 
from a confusion between two entirely different 
matters. As regards exceptional war measures 
taken in the different countries in resort of enemy 
property, there Is a reciprocal provision, these ex- 
ceptional war measures being confirmed on both 
sides. Quite a different matter is that of the mode 
in which enemy property shall be dealt with there- 
after. German property, as is admitted in the Ger- 
man note, must serve towards meeting Germany's 
obligations io the Allies. The compensation to the 

840 



And Economic Sections of the Treaty 

German property owner must be made by Germany 
Itself. In this respect there can be no question of 
reciprocity, 

(c) On the question whether German property 
should serve as a guarantee for the Liabilities of the 
states allied with Germany, it is to be observed, on 
the one hand, that t bo actions of Germany and her 
allies during the war have given rise to complete 
solidarity between these Towers from (lie economic 
standpoint. For Instance, negotiations undertaken 
withoul scruple between Germany and her allies 
have resulted in Hie division between these coun- 
tries of (lie proceeds Of Hie Allied and Associated 

property liquidated contrary to all right in (lie ter- 
ritories occupied by the German troops. Further, 
Hie German authorities have in several ways treat- 
ed Hie Allied and Associated Powers as being joint- 
ly concerned. For Instance, they have seized French 
credit balances in Belgian banks as a measure of re- 
prisal against acts done in other Allied states. They 
have .similarly jusiiiicd (he liquidation o\' French 
properly in Germany on the ground that similar 
measures have been taken against German property 

in Other Allied countries. Tims, the principle o\' 

joinf liability to which Germany now objects has 
been initiated by herself, and she has created a sit- 
uation which docs not permit iho Allied and Asso 
ciated Powers in practice to separate the obliga- 
tions o\' her allies from her own. Nevertheless (he 
Allied and Associated Powers are prepared to omit 
from (he charge on (he property of German uation- 

•A 1 1 



The Making of the Reparation 

ale the liability to satisfy the unpaid debts of na- 
tionals of Powers allied with. Germany. 

(d) The method of using this property laid down 
by the treaty cannot be considered, either in prin- 
ciple or in the method of its application, as a meas- 
ure of confiscation. Private German interests will 
only be injured by the measures contemplated so 
far as Germany may decide that they shall be, since 
all the proceeds of German property will be car- 
ried to the credit of Germany, who is required to 
compensate her own nationals, and will &-o to re- 
duce her debt to the Allied and Associated Powers. 



Contracts. 

"Most of the other countries have insisted upon 
a general plan by which contracts existing before 
the war, between their nationals and nationals of 
Germany, shall be generally canceled. There are 
some exceptions like pecuniary liabilities; and some 
special kinds of contracts like insurance are other- 
wise treated. The United States, Brazil, and Japan, 
however, have not adhered to this plan, and are 
expressly excepted from its operation. 

"In the United States many contracts were dis- 
solved, under our laws, by the state of war. Ex- 
amples are: partnerships; contracts requiring com- 
munication with the enemy; and, under decisions 
of our courts, contracts the performance of which 
was rendered unjust or inequitable on account of 
the changed conditions produced by the state of 
war. Other contracts were merely suspended. 
These last would be revived automatically under 
our laws, at the end of the war, and, so far as the 
United States is concerned, are treated as revived 
in this draft. 

"The dissolution of all contracts, which are now 
merely suspended, would entail great confusion 
land hardship upon many persons and businesses, 
including both those of the United States and of 
Germany; it would not seem just to cancel such 
contracts without the consent of the owners. 

''The other countries represented on the Economic 
Commission have appreciated the position of the 

343 



The Making of the Reparation 

Unite*! States in this respect and have consented 
that this country, as well as Brazil and Japan, 
should leave unchanged the legal status of con- 
tracts to which their nationals are parties. 

"Provision is made, however, in Article I, where- 
by nationals of all the Allied and Associated 
countries, the United States included, shall have 
access to a new tribunal with a neutral president, 
so that they need not be compelled to resort to 
German courts for the adjudication of their con- 
tractual rights after the war.'' 



INDEX 



Ador, M. Gustave, 113, 267 

Agricultural material, de- 
livery of, by Germany, 162 

Allies' rights to reparation, 
20 

Allocation, control of, Si 

Allowances, separation, 2 7, 
28, 31, 32, 33 

Alsace-Lorraine, exempt 
from customs duties, 91, 
193, 194, 195; and pre- 
war debt, 179; credits to 
Germany on public prop- 
erty, ISO 

American citizens', etc., right 
to do business in Germany, 
98 

Ammonia, sulphate of, de- 
livery of, 165 

Animals: domestic, appro- 
priated, 4, 43, 44; to be 
replaced, 157; immediate 
delivery of, 161, 162 

Aoki, M. N., 17 

Arbitral Tribunal, Mixed, 
112, 113, 225-229, 232, 
235, 266-271 

Armies of occupation, ex- 
penses of, 56. 62, 174, 175 

Armistice Convention of Nov. 
11, 191S, 317, 31S, 320, 
321, 323, 326 

Artistic works, protection 
of, 208 

Austria and reparation pay- 
ments, 35; treaties with 
Germany abrogated, 98, 
211 ; financial adjust- 
ments, 1S2, 1S3, 1S4 

Austria-Hungary, financial 
adjustments with Ger- 
many, 182, 183, 1S4 

Azores: Xew York cable, 170 

Banks, waiver of special 
rights in, 182 

Baruch, Bernard M., 15, 81 



Belgium: invaded, 2, 3; 
members of Commission 
on Reparation, 16; special 
compensation for war ex- 
penses, 34, 35, 36; pri- 
ority in time of payments, 
35; issue of German bonds 
to cover war costs, 62, 63; 
violation of neutrality, 
12S; delivery of livestock 
to, 161, 162; delivery of 
coal to, 163; special arti- 
cles to be restored to, 17 2, 
173; credits to Germany 
on public property, 181; 
neutralization of, 300, 301 

Benes, M., 17 

Benzol, delivery to France, 
165 

Bianchi, M. Joas de, 17 

Big Four. The. 15;;, 29 

Birds, protection of, 206 

Bond issues, 61, 62, 63, 64, 
65, 71, 72, 143, 144, 145, 
14S 

Bourquin, M., 16 

Bouts, Dierick, "Last Sup- 
per," 173 

Brazil, special reparation to, 
187 

Erest-Litovsk treaty abro- 
gated. 99;;. 1S4 

Brown, J. Bailey, 88 

Bucharest treaty abrogated, 
99, 184 

Eulgaria and reparation pay- 
ments, 36;;; treaties with 
Germany abrogated, 9S, 
211 

Cables, submarine, transfer 
of, 135; ceded, 169, 170, 
171; protection of, 203 

Categories of damages, 2 6, 
32-34. 45, 135-138 

Cattle: consumed or driven 
away, 4, 43, 44; for sale 



345 



INDEX. 



In Germany, 44; repara- 
tion in kind, -14, 4 5, 157, 
161, 162 

Cattle-feed, shortage. 4 4 

Chamiec, M„ 17 

Chemical drugs, deliveries 
of, 167, 16S 

Chemical drugs, reparation 
in. 167, 16 S; price for, 
168. 169 

Cheysson. M„ 16 

Chlesa, Eugenio, 16 

Cinchona bark, delivery of, 
169 

Civil procedure, convention 
relating to, 20 9 

Civilian population, compen- 
sation for damages to. 28, 
SO, 31, 3 3 . 3 4 

Civilian population, defined. 
30, 31 

Claims. German, against for- 
mer allies, 1 S o 

Clearing-house system for 
collection of debts, 99-102, 
214-229 

Clemenceau, 25, 26, 3S. 290. 

329 

Clementel, Georges, SI 

Coal: shortage. 39-42: mines 
destroyed. 39, 40, 85, 163; 
demands upon Germany 
for, 4 0. 41. 42; produc- 
tion insufficient, 4 2. 43: 
options, 58 : deliveries 
modified. 73: deposits. 85; 
reparation in. 162, 163, 
164, 165: price for. 164, 
165; supervision by Rep- 
aration Commission. 165 

Coal tar. delivery to France. 
165 

Coke: reparation in, 165; 
price for, 165, 166 

Collisions and salvage at 
sea. 204 

Command, single, on land 
and sea. S4 

Commercial exchange con- 
tracts. 2 55 

Commercial relations. 90-95 

Commercial statistics, unifi- 
cation of, 2 04 



Commission on Reparation, 
members of, 15, 16, 17 

Competition, unfair, 94. 198, 
199 

Concert pitch, establishment 
of. 205 

Const an tinople-Constanza ca- 
ble, 170 

Consular officers, right to 
send to German v. 95, 98 

Contracts. 10S-112, 247-206, 
343, 344 

Conventions, 203-210 

Copyrights. 114 

Costa. Alfonso, 17« 

Cotton: supply, 41; 
■•futures," 256 

Council of Ten, The. 15 

Credit, new basis of. 6S 

Credits to Gennanv. 134, 
135. 17S, 179. ISO 

Crespl, Mr.. 82 

Cunlifle, Kt. Hon. Lord, 16 

Customs duties, German, 90; 
exemptions, 91, 92; equal- 
ity of treatment in. 98; 
r e g u 1 a t i o n s. 191-1 9 : 
tariffs, publication of, 204 

Czechoslovak Republic: Rep- 
aration Commissioners, 17 

d'Amelio, M., 16 

d'Andrade, M. Freire, 17 

Damages, categories of. for 
which Gennanv is liable, 
26. 32-34. 45. 135-13S 

Danielopol, M., 17 

Davis, Norman II., 15. IS 

Debt, interest on. 148, 149; 
pre-war. 17S 

Debts. 99-102. 214-229 

Defaults, wilful, 59. 00; in 
ease of, 14 9; remedies in 
event of. 149 

Despret, M., 16 

Dillon, Colonel. IS 

Documents of title, 153 

Drag-Doutschitch, M., 17 

Dulles. John Foster. IS. 24: 
address bv. 289-297, 298. 
312. 313. 315, 310. 323- 

o o 7 

Duties, equality in, 191, 192; 

rate of, in force, 195, 196; 



346 



INDEX. 



reservations as to occu- 
pied regions, 196 
Dyestuff, reparation in, 167, 
L68; price for, 16S, 169 

Economic clauses of the 
Treaty, 89; subdivisions, 
90 
Economic Drafting Commit- 
tee, members, 81, 88; or- 
ganized! 87; representa- 
tion on, 88, 89; worth of, 
89, 90 
Emden-Azores cable, 170 
Emden-Brest cable. 170 
Emden Teneriffe cable, 170 
Emden-Vigo cable, 170 
Estates, transfer of, 254 
Europe, llnancial and eco- 
nomic situation of, 67 
Exports: French, 85; ques- 
tions relating to, 90-93; 
no discrimination as re- 
gards, 192, 193 
Factories destroyed, 3 
Field examinations, 18, 19 
Financial clauses, 17 3-187 
Fisheries, North Sea, 197, 

208 
Flume situation, 73 
Foberti, M., 16 
Foch, Marshal, 320, 329 
Food relief, measures for, 83 
Foreigners, naturalization 

of, 95 
Fourteen Points, The, 4, 19, 
20, 23, 89, 290, 298, 299, 
303, 304, 306, 307, 814, 
317, 318, 321 
France: Soldier dead, 2; 
German invasion, 2, 3, 4, 
7; devastated, 2, 3, 4, 85; 
wounded soldiers, 3; atti- 
tude as to reparation, 4, 
5, 2 2, 24, 27; members of 
Commission on Repara- 
tion, 16; favors inclusion 
of war costs, 21, 22, 23, 
24, 25; on pensions and 
separation allowances, 26, 
27; proposal as to alloca- 
tion of German ships, 37, 
38; delivery of German 
coal to, 39, 40, 41, 163; 



no estimate of losses, 47; 
payment to Germany in 
1S70, 48; seeks Immediate 
r eli e i. 50; Germany's 
recognition of obligation 

to make good the devasta- 
tion in, 65; on transitory 
measures. S2, 83; position 
With regard to necessity 
of economic relief and co- 
operation, S5; representa- 
tion on Economic Com- 
mission, SS, 89; free ad- 
mission of products from 
Alsace-Lorraine, 91»; 
Germany enjoined from 
employing discriminatory 
methods against, 93; guar- 
antee of private obliga 
tions, 101; delivery of 
live stock to, 161; coal 
mines destroyed, 1G3; de- 
livery to of COal products. 
165; special articles to be 
restored to, 171; exempt 
from Alsace Lorraine pre 
war debt, 17 9. ISO; ad- 
dress of Minister of 
Finance, 316-322 

Frye, sinking of, 104 

Germany: Invasion of France 
and Belgium, 2, 3, 300, 
301; merciless aggression, 

2, 4, 6; capacity to pay, 

3. 68, 69, 74; responsi- 
bility for all war costs, 
20, 21; calculation of in- 
debtedness, 27. 28, 29; 
categories of damage for 
which held responsible, 
32-34, 135, 136; surren- 
der of merchant marine, 
3 7; delivery of coal. 39- 
41, 162-164; delivery of 
construction material. 43; 
economic warfare prose- 
cuted by, 44, 45; repara- 
tion payments, 4 5, 4 6, 4 9, 
50, 52, 55, 56; reparation 
limited to one generation, 
59; bond issues, 62, 63, 
64, 71, 72, 113. 144, 145, 
14S; attitude toward rep- 



Ul 



INDEX. 



aration, 64. 65; counter- 
proposal offering, 66, 07. 

OS. 69; unfair trade prac- 
tices, 7 9. 82, 94; com- 
mercial relation.-. 90-95: 
treaty arrangements, 96- 
99; and seized property, 
103-108; responsibility. 
12 7: inability to make 
complete reparation. 127: 
reimbursement to Bel- 
gium. 128; initial pay- 

ts, 130, 131; repara- 
tion in kind. 131, 
lei. 157. 158, 15.'. 100: 
restitution of stolen arti- 
cles. 13 2; credits in favor 
of. 134. 135: interest on 
debt. 14S. 149: in case of 
default. 149: ships ceded 
by. 151. 15:\ 153. 155; 
ships to be built for A'.- 
1 account by. 153, 151: 
waiver of shipping claims, 
delivery of live stock, 
101. 10 2: delivery of agri- 
cultural material. 102: 
delivery of coal products. 
105: delivery of dye-stuff 
and chemicals, 10 7. 10S. 
109: submarine c. 

'.. 109. 170. 171: 
special articles to be re- 
stored by. 171. 172, 
reparation and T: 
I first charge on pub- 

lic assets. 173: gold ex- 
port. 174: armies of occu- 
pation, 174. 175: surren- 
der of non-military prop- 
erty. 17 5. 170: T. 
charges, 17 0. 177: credit 
to. on account of pre-war 
debt. 17S. 17 9. ISO: 
credits to, on public prop- 
erty in ceded territory, 
ISO. 181; waive: 
rights in banks of foi 
allies. 182; fix 
justments. 182, 183, 184; 
cede rights in public util- 
ities in certain states. 
IS 4, IS 3; transfers 



claims of former allies, 
186; guarantee to Brazil- 
ian Government, 1S7; 
equality of duties. 191 : 
regulation of import s. 
191: no discrimination as 
regards exports, 192: 
favor granted equally, 
193: products free into, 
193, 194, 195; shipping, 
19 7. 1 9 S : and unfair com- 
petition, 19S. 19 9: treat- 
ment of nationals of Al- 
lied and A ssociated 
Powers. 200-202; to 
consuls. 201, 202; time 
limit for obligations. 202; 
treaties. 2 3-214: settle- 
ment of debts. 211-229: 
restoration of Allied prop- 
erty in, 22 9-2 40: dissolu- 
tion of all pre-war con- 
tracts. 247-200: violation 
of international pledge, 
302: full reparation de- 
manded of, 314. 32 4 
Cold exports, control of, 174 
Id Marks," definition of, 

1 8 

.t Britain: and repara- 
tion. 4. 0: members of 
Commission on Repara- 
tion, 10: in favor of inclu- 
D of war costs, 2 0. 21. 

2 2. 2 3. 2 4. 25: on pen- 
sions and separation al- 
lowances. 20: and pooling 
of ships. 38; estimate of 
lessos. 47; apprehension 
of German e c o n o m i c 
supremacy, 51: skull of 

tan Mkwawa to be re- 
stored to. 172 

ce: members of Commis- 
sion on Reparation. 10; 
reparation payments 
Greene, Jerome P.. 16, IS 
Hedjaz. King of the, orig- 
inal Koran of the Caliph 
Othman to be restored to. 
1 7 2 
Ileuvel. M. Van den, 16, IS, 



O ( □ 



INDEX. 



Homes destroyed, compensa- 
tion tor, 28 

Horses, French and Belgian, 
for sale in Germany. I I ! 
to be replaced. 157, 161 

Hospital ships, exempt from 
dues and charges In port, 
205 

Hughes, Premier W. H., 6, 
16, IS. 20, 23, 24. 25. 289, 
828, 331, 332, 334; speech 
by, 2 9 8-315 

Hungary and reparation 
payments, 36; treaties 
with Germany abrogated, 
98, 211; financial adjust- 
ments. 182, 183, L8 i 

Immigration, alien, 95 

Imports, regulation of, 85, 
90. 91. 92, 93. 191, 192 

Industrial co-operation, 8 1 

Industrial property, 114-124, 
20S, 271-2S1 

Industries in Germany, Na- 
tional treatment as re- 
gards. 2 00 

Insurance: Contracts of, 
257; lire, 257, 25S, 259; 
life. 259, 260. 261, 262; 
marine, 262, 263; other, 
264 

International Agricultural 
Institute at Rome, creation 
of. 206 

International co-operation, 
84 

International Harvested 
Company, SS 

International law. effect of, 
upon right of reparation, 
299. 300: rights independ- 
ent of, 302 

Invaded territories, resto- 
ration of, 30 

Iron deposits, 85 

Italy: devastated, 2, 87; 
members of Commission 
on Reparation, 16; repar- 
ation payments, 35; de- 
livery of coal to, 41, 163, 
164; necessity of economic 
relief. 85; debt, 86, 87; 
wealth, 86; taxation, 86, 



87; imports and exports, 
87 

Japan: members of Commis- 
sion on Reparation, 17 

Judgments, 108, 247, 252, 
253 

Klotz, L. L., 16, 18, 24, 323, 
326, 327, 32S, 330; ad- 
dress- of. 316-3 2 2 

Lamont, Thomas "W., 18, S7, 
88 

"Last Supper," The, painted 
by Dierick Bouts, 173 

Law. the reign of, 308, 310, 
311, 314, 315 

Leases. 254 

Lebrun, Albert, 16 

Leelanaw, sinking of, 104 

! . gge, Alex. SS 

Lens coal fields destroyed, 
39, 40 

Licenses, 116, 122, 273, 276, 
279. 280 

l lens, 25 4 

Liquor traffic, North Sea, 
197, 208 

Literary works, protection 
of, 208 

Liverpool Cotton Association, 
256 

Live stock, delivery of, by 
Germany, 161, 162 

Lloyd George, 4, 6, 21, 25, 
26, 38, 290, 313, 329 

Lome-Duala cable, 170 

Loucheur, M., 16, 323, 32 4, 
325, 335 

Louvain, Library of, burning 
of, 172, 173 

Lusitania, sinking of, 10 1 

Luxemburg, tariff conces- 
sions, 90, 92, 195; delivery 
of coal to, 164 

McCormick, Vance C, 16 

McKinistry, General, 18 

MacDowell, Charles H., 88 

Machinery, removed, 3, 157 

Maritime coasting trade, 197 

Matches, white phosphorous 
in manufacture of. 205 

Material, construction, de- 
livery of, 43, 157 

Meat, production of, 44 



349 



INDEX. 



Metric system, unification 
and improvement of, 205 

Michalacopoulos, M., 16 

Milk, production of, 44 

Mines 2 destroyed, 35, 163; 
concessions concerning, 
254 

Minors, protection of, 206 

Misu, M,, 17 

Mixed Arbitral Tribunal, 
112-114, 266-271 

Mobilization of industrial 
resources, 84 

Moniz, M. Egas, 17 

Monrovia-Lome cable, 170 

Monrovia-Pernambuco cable, 
170 

Mori, M. Kengo, 17 

Mortgages, 17 7, 2 54 

Motor-cars, international cir- 
culation of, 203 

"Mystic Lamb," painted by 
Van Eyck brothers, 173 

Nagaska, M. H., 17 

Nationalities, new, recogni- 
tion of, 201 

Nationality, duel, question 
of, 95 

Nationals of Allied and As- 
sociated Powers, treatment 
of, 200-202 

Navigation, freedom of, 283- 
285 

Negotiable instruments, 251, 
256, 257 

Negotiations, pre-armistice, 
19, 20, 24, 28 

Nielsen, Fred K., 88 

Nord coal mines, 163 

Non-military property sur- 
rendered, 175, 176 

Non-signatories, rights of, 
301 

North Sea: fisheries, 208; 
liquor traffic, 208 

Notes, German and Amer- 
ican, 304, 305, 306 

Obligations upon Germany, 
time limit for, 20*2 

Occupations in Germany, 
national treatment as re- 
gards, 200 

Olchowski, M., 17 



Opium treaty, 213, 214 
Optional payments, 18 6 
Orlando, Mr., 25, 26, 290, 

329 
Osuski, M., 17 
Ottoman Public Debt, 182, 

183 
Palmer, Bradley W., 88 
Paris Economic Conference, 

82 
Participation Certificates, is- 
sue of, 148 
Pas de Calais coal mines, 

163 
Patents, 114-123, 276, 277 
Patent drugs, unification of 
pharmacopceial formulae 
for, 205 
Payments, in gold or its 

equivalent, 150 
Payments, interest, 59 
Peace, conditions of future, 

agreed upon, 74 
Penal Indemnity and Repar- 
ation, distinction between, 
313 
Pennie, John C, 88 
Pensions, 27, 28, 31, 32 : 33 
Pershing, General, 317 
Phylloxera, precautionary 

measures against, 206 
Poland: and German aggres- 
sion, 2; members of Com- 
mission on Reparation, 
17; tariff concessions, 90; 
free from German dis- 
crimination, 93; German 
colonization of, 179; 
products free from cus- 
toms duties, 194, 195 
Political situation among the 

Allies, 67 
Ports, Waterways and Rail- 
ways, 282, 283 
Portugal: members of Com- 
mission on Reparation, 17 
Postal Union, Universal, 206, 

207 
Prescriptions, 108, 247, 249 
Prices, control of, 84, 85 
Private owners, dispossessed, 
to be indemnified by Ger- 
man Government, 185, 186 



S50 



INDEX. 



Production, control of, 84, 
85 

Products from Alsace-Lor- 
raine and Polish territory 
free from customs duties, 
193, 194 

Property: private, of enemy 
nationals, disposition of, 
102-108, 229-246, 338- 
342; industrial, 114-124, 
271-281 

Protchitch, Hon. Mr., 323 

Publications, obscene, sup- 
pression of, 2 05 

Public utilities, ceded rights 
in, 184, 185, 186 

Quinine, salts of, delivery of, 
169 

Radio-telegraphic communi- 
cations, international, 207 

Railway trucks, sealing of, 
subject to customs inspec- 
tion, 203 

Railways, technical stand- 
ardization of, 204 

Raw material, allocation of, 
82; limiting amount to 
go into Germany, 83 

Registrations, 114 

Registry of ships of coun- 
tries having no sea coast, 
198 

Re-insurance, 264, 265, 266 

Reparation: American plan 
of, 21, 22, 25; English 
scheme, 22, 23; Germany's 
capacity to pay, 22; set- 
tlement of principles of, 
36, 37; in kind, 45, 131, 
132, 151, 157, 158, 159, 
160; in money payments, 
46; how much, should 
Germany pay? 46-57; its 
officers, 140; its employees, 
140; procedure, 141; au- 
thority, 142; voting, 146, 
147; issue of Participa- 
tion Certificates, 148; dis- 
solution, 151 

Reparation Commission, 
The: established, 15; its 
membership, 15, 16, 17, 
138, 139; first meeting of, 



18; its character, power, 
and duties, 56, 57, 129, 
130, 142; decisions of, 57; 
instructions for the guid- 
ance of, 57, 59, 142-145; 
facilities accorded, 133, 
134; salaries and ex- 
penses, 134; right of with- 
drawal from, 139; its 
Bureau, 140 

Restitution of stolen arti- 
cles, 132, 133 

Rhine, occupation of right 
bank, 318 

Romanos, M., 16 

Royalties, 117, 274 

Ruher, Mr., 171 

Rumania: and German ag- 
gression, 2; members of 
Commission on Repara- 
tion, 17; reparation pay- 
ments, 35; treaties with 
Germany abrogated, 99, 
212; financial adjustments 
with Germany, 182, 184 

Russia: treaties with Ger- 
many abrogated, 9 8, 99, 
211, 212; financial adjust- 
ments, 182, 184; conces- 
sions granted to Germany 
annulled, 212, 213 

Salandra, M., 16 

Samoa, national treatment 
of German trade in, 209 

Sao Paolo, state of, coffee 
sale, 187 

Savtchitch, M. Miloch, 17 

Seavick, M., 17 

Securities, sale of, 256 

Serbia: and German aggres- 
sion, 2; Reparation Com- 
missioners, 17; reparation 
payments, 35 

Shipping: charges, equality 
of treatment in, 98; 
claims, waiver of, 156; 
most-f a v o u r e d-nation- 
treatment, 197, 198 

Ships, surrender of, 37; allo- 
cation of, 37-39; tempo- 
rary retention of, 59; 
ceded by Germany, 151, 
152, 153, 155; documents 



351 



INDEX. 



of title to, 153; to be built 

for Allied account, 153, 

154; certificates, 197, 19S 

Siemens, Herr Karl F. Von, 

on industrial situation in 

Germany, 42, 43 

Signatories, rights of, 300 

Smith, Sir Hubert Llewellyn, 

81 
Smuts, General J. C, memo- 
randum on reparation, 2 9- 
32 
Soldier: dead, 1, 2; wounded, 

3 
Solf. Herr, note to Wilson, 

305 
Sonnino, Baron, 318 
Sovereignty, rights of, 203 
Spa. conference at, 74 
Special provisions, 171-173 
Bperanza, M., 16 
State toll on the Elbe, re- 
demption of, 2 04 
Stock Exchange contracts, 

255 
Stolen articles, restitution 

of, 132 
Stoyanowitch, M., 17 
Submarine activity, losses 

caused by, 37 
Suez Canal, free use of. 204 
Summers, Leland L., 18, 88 
Sumner, Rt. Hon. Lord, 16, 

21, 23, 300, 302, 303 
Supreme Council, The, 25, 34 
Sussex, sinking of, 104 
Tariff: German discrimina- 
tory, 80; concessions, 90- 
92 
Tatsumi, Kenejo, 17, 82 
Taussig, Dr. Frank, "W., 88 

Taxes, burdensome, 3, 5; for 
war costs, 28; in Italy, 86; 
national treatment as re- 
gards, 200 

Telegraphic Union, Interna- 
tional, 207 

Teneriffe-Monrovia cable, 
170 

Territories invaded, evacua- 
tion of, 30, 291 



Textiles from Alsace-Lor- 
raine free from customs 
duties, 194 

Toll dues, redemption of, 204 

Tonnage measurement of 
vessels for inland naviga- 
tion, 205 

Trade-marks, 114, 276, 277 

Trading with the Enemy 
Act, 102, 105 

Transitory measures, adop- 
tion of, 82, 83 

Treaties, 73, 96-99, 203-214 

Treaty: of Versailles, 7, 8; 
of Neutrality, 19, 2 3, 34; 
charges, priority of, 176, 
177; of London, 301, 332 

Turkey, treaties with Ger- 
many abrogated, 98, 211; 
financial adjustments with 
Germany, 182, 183; rais- 
ing of customs tariff, 204 

United States of America: 
members of Commission 
on Reparation, 15, 16, 18; 
scheme of reparation, 19, 
2 0. 21, 22; opposed to in- 
clusion of war costs, 24, 
25, 26; on pensions and 
separation allowances, 28; 
secure special compensa- 
tion for Belgium, 34, 36; 
on pooling of ships, 3 8, 
39; estimates of Allies' 
losses, 46, 47; and Ger- 
man reparation payments, 
51, 52, 54; Allies' indebt- 
edness to, 53; consent to 
present reparation ar- 
rangement, 55; and Ger- 
man counter-proposal, 6 5- 
69; on questions of prin- 
ciple, 70; urges fixing 
Germany's liability, 71; 
to guarantee bond issue, 
71, 72; members of Eco- 
nomic Commission, 87, 
88; treaty arrangements 
with Germany. 97, 98; at- 
titude toward clearing- 
house plan, 101; on dispo- 
sition of seized enemy 
property, 103; on cancel- 



352 



index:. 



lation of 

111; and 

115-121 
Van Eyck brothers, 

Lamb," 173 
Versailles, 
Voting by 

mission, 

147 
Wage earner, financial 

from absence of, 28 
War costs, 21, 22, 23, 

26, 290 
Ward, Dudley, 16 



contracts, 109, 
foreign patents, 



Mystic 



Treaty of, 7, 8 
Reparation Corn- 
rules for, 146, 



loss 



25, 



Wemyss, Admiral, 320, 32 

White Slave Traffic, supprcs 
sion of, 2 05 .•-- 

Wilson, .President, 25, 
38, 70, 290, 303, 301, 
306, 307, 308, 309, 
311, 312, 317, 318, 

Women, suppression of night 
work for, 205 

Yap-Shanghai cable, 170 

Young, Prof. Allyn, 18, 88 

Zahariade, M., 17 

Zalewski, M., 17 

Zones, free, in ports, 285 




THE END 






* 



c 



LIBRARY OF CONGRESS 





007 706 678 » 



